Debt crisis looms as home repossessions rise
Fears that Britain is plunging towards a bad debt crisis were heightened yesterday as figures suggested proceedings to repossess homes have risen by 55 per cent.
Actions begun by lenders rose to 29,991 in the three months to the end of September from 19,359 last year. There has been a 66 per cent rise in the number of orders being made over the same periods, according to the Department of Constitutional Affairs (DoCA).
Egg, the online bank, said bad debt charges had risen to £60m in the third quarter from £47.1m a year ago, and from £58.3m in the previous quarter. Egg warned that bad debts in the fourth quarter were now to be worse than expected.
Data released by DoCA yesterday relates to court proceedings in England and Wales covering local authority and private mortgages supplied by banks and building societies. They do not indicate how many homes were repossessed because not all orders would have led to execution of a warrant to turn over ownership.
It does indicate that lenders are finding more reason to pursue repossessions. The number of orders actually made by the courts in the third quarter stands at 19,687. That is a huge jump on the same time in 2004 when 11,862 orders were made. Experts have pointed out that the figures bear no resemblance to the numbers of repossessions seen at the height of the property crash in the early 1990s and are suggesting that the current rise is linked to high levels of debt borrowers have on cards and loans.