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News: Debt strain shows in repossession orders

Mortgage repossession orders made by courts in England and Wales are at a five-year high, figures from the Department for Constitutional Affairs show.

The DCA said courts ordered 24,017 repossessions in the three months to September, a 22% increase on the same period in 2005.

However, nearly half of these were so-called suspended orders. A suspended order gives the homeowner a chance to catch up with mortgage arrears and does not necessarily entail the home being repossessed.

 

Strain

Separately, official figures showed a record number of people in England and Wales going insolvent. Over 27,000 people became insolvent July and September, a rise of 5.7% on the previous quarter and an increase of 55.4% on the same period a year ago.

The figure includes bankruptcies and those entering Individual Voluntary Arrangements (IVAs) to manage debts.

 

David Stubbs, senior economist at the Royal Institute of Chartered Surveyors said, "The likely increase in interest rates this month, plus the possibility of more monetary tightening in 2007, make it all but certain that the numbers entering the repossession process will continue to rise."

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