27,100 houses were repossessed during 2007 according to the Council of Mortgage Lenders - a 21% increase on the year before when house repossessions reached 22,400.

The Council Of Mortgage Lenders, who represent banks, building societies and other lenders who together undertake around 98% of all residential mortgage lending in the UK, said that fewer than 1 in 400 mortgages led to repossession in 2007.

"The CML had previously forecast that there would be 30,000 repossessions in 2007, but the actual figure is nearly 10% lower than forecast, at 27,100. Although repossessions have risen since their remarkable low point of fewer than 10,000 a year in 2003 and 2004, they continue to represent a tiny fraction of all mortgages."

The headline figure of 27,100 falls well short of the record number of repossessions seen in the UK - 75,540 seen during the 1991 housing crash.

However, while taking some comfort from the fact that actual repossessions were lower than the CML themselves forecast, the number of repossessions would certainly have been higher if it hadn't been for people entering into sale-and-leaseback arrangements, where companies buy properties from home owners at less than their market value and then allow the home ownerr to rent the property as a tenant.

ITN estimate the number of households who avoided repossession by entering into sale-and-leaseback agreements at 25,000. If those houses had been repossessed instead, the official figure would have almost doubled.

And the fact that the sale-and-leaseback market

The number of mortgages that were in arrears of more than three months rose by nearly 9% during 2007 to 129,800, but the rate of arrears of six months or more was still only around one-seventh of the level experienced in the early 1990s.

"Looking ahead, it remains difficult to forecast the likely level of arrears and repossessions in 2008 as conflicting factors are at work," said the CML.

"The good news is that the impact of payment shock is likely to be more muted than previously expected, thanks to the downward path that interest rates now appear likely to follow. But there is no room for complacency. Funding pressures remain, and are having a specific impact on the capacity of the adverse credit sector to meet demand. This may affect arrears and repossessions."

"The number of repossessions is likely to be higher in 2008 as a result of wider issues in the economy and the mortgage funding markets. Anyone who thinks they might be heading into difficulty should contact their lender, as problems are easier to resolve if they are tackled at an early stage.

"Lenders want to avoid repossessions just as much as borrowers do."

February 8th, 2008

Common misspellings: reposession, repossesion, reposessions, repossesions, reposessed, repossesed