Property repossessions rocketed by 15 per cent to 9,100 in the first quarter of this year, according to figures released by the Council of Mortgage Lenders.
This represented a leap from the previous quarter, where 7,900 properties were taken into possession, but was also 10 per cent lower than repossessions recorded in the corresponding quarter in 2010.
Meanwhile cases where a mortgage holder’s arrears exceeded 10 per cent of their mortgage balance also worsened slightly, rising to 27,700 for the first quarter from 27,400 at the end of 2010.
Despite this the total number of mortgages in arrears continued to fall in all other arrears bands, with the number of mortgages with arrears equivalent to 2.5 per cent or more of the outstanding balance improving to 166,900, down from 170,000 (1.5 per cent of all loans) at the end of December 2010 and an 11 per cent improvement on the figure of 187,300 recorded a year earlier.
Michael Coogan, director-general of the Council (CML), said: “Looking ahead, the financial position of many households is likely to be stretched for some while, and some will inevitably find themselves in difficulty.
“In essence, good arrears management practice is a balance between giving households every chance to rehabilitate and get back on track, and limiting the damage in the minority of cases where this is not going to be achievable.”
Meanwhile Bev Budsworth, managing director of debt management firm The Debt Advisor, welcomed the decrease in repossessions but warned that the situation will get worse before it gets better.
She said: “Lenders just aren’t as confident as they were last year that they will be able to lower arrears and repossessions.
“Today’s figures do not come as a shock. Although it’s good to see repossessions down on 12 months ago, unfortunately, like inflation, I expect things to get worse before they get better as people feel the financial squeeze in this increasingly volatile economy.”