With 45,000 repossessions expected during 2008, and some observers predicting the true figure could go much higher, lenders who have already taken back nearly 19,000 homes this year face mounting criticism for their handling of serious arrears cases.
"A high proportion of people who fall behind with mortgage repayments do have their homes repossessed, although this may be skewed markedly towards borrowers with poor credit ratings and those in the sub-prime mortgage market.
"If you are not among those groups, chances of coming to an arrangement with a lender are almost certainly higher."
Data from the
Today, 28% of borrowers six months in arrears are getting thrown out. Capital Economics reckons the comparative figure was less than 10% back in 2004.
"The sharp rise in repossessions relative to arrears almost certainly reflects growing default problems in the sub-prime sector, where lenders will be quicker to take action," Stansfield says.
"But
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the tightening in lending criteria and the rise in mortgage rates will have left some borrowers unable to minimise the rise in their mortgage repayments by remortgaging."However
"We have been piloting a prepossession scheme whereby borrowers struggling with mortgage payments have their properties accurately valued and proactively marketed to sell quickly, avoiding an unwanted repossession for both customer and lender."
King suggests a Government-backed prepossessions scheme could include a scheme to set an affordable commercial rental rate between lender and borrower to help thousands of people across the UK.
King thinks that lenders should accept some responsibility for mistakes with prolific lending.
"Some lenders are acting utterly without principle in trying to get a repossession order as quickly as possible", he says.
"Often there is an acceptable alternative. Accepting a decreased payment in the short term can be more prudent for lenders, considering costs associated with repossession and reselling properties in a falling market.
"By charging a realistic rent, lenders can ride out downturns and see their asset increase in value while still receiving regular income", he says.
"It is a fact that more and more borrowers are getting into difficulties. Even though lenders are taking a sympathetic line, repossessions are going to increase."
Marks says that although lenders sometimes devise "innovative solutions in particular cases, lenders cannot really get into the business of acquiring and holding a large stock of property.
"I don't see many lenders being in a position to buy properties off customers in difficulties", he says.
To be granted a longer repayment period, however, borrowers might have to prove their pension income would be large enough to handle repayments beyond their normal retirement date if a lender is not to be accused of 'irresponsible lending'.
Either option leads to a homebuyer making higher payments in the longer term, so both should be seen as essentially short-term solutions, Boulger says.
Homeowners with at least a 25% equity stake in their homes - and possibly just 10% - might be able to remortgage to a lower rate, which might be worth it if they are not hit by early repayment charges on their present loan, he says.
They might also be able to switch to a more flexible loan, which allows them to borrow a bit more and thus to gain a 'cushion' which offers some protection in those months where they cannot afford any payment at all.
Boulger says independent advice from a broker should be sought before serious problems develop later.
*In 1991, the peak year for repossessions, some 75,540 homes were seized, out of nearly 143,000 repossession orders made that year. The Tories won the General Election in the following year.
::INFORMATION: movewith us (0870 420 4131 and www.movewithus.co.uk); John Charcol (0800 617 181 and www.charcol.co.uk).
:: WHAT HOUSE PRICE CRASH, ASKS NEW REPORT
Average house prices in
The report, compiled by consultancy Academetrics for the Financial Times House Price Index appears to provide a sharply contrasting view to reports from leading building societies including Nationwide and
What causes this huge discrepancy?
One factor is prices which may still be rising in some areas of
The FT House Index also includes properties purchased without a mortgage; about 40% of homes in the UK are owned outright without a loan, and their sellers may well be able to bypass mortgage lenders.
The Acadametrics survey does acknowledge "nominal" falls on both a monthly and annual basis in five of the ten regions of
Dr
Pretty puzzling words for owners everywhere thinking of selling up in the next six months.
:: BUILDERS FACE HISTORIC SLOWDOWN
The speed and scale of the downturn in housing markets is "unprecedented" in the last 60 years, says a Housing Market Report (HMR) on the new homes market published this week by
The survey says both site visitors and net reservations on new home sites were "down sharply" between May and June.
It says that "net new home prices are falling, incentives are on the increase, and builders are pessimistic about prices over the next 12 months. They also expect 2008 sales to be below 2007."
A record balance of builders reported lower land values in the second quarter. Many new homes could be left standing empty as many builders claim that work in progress and existing stocks are more than adequate to meet current demand.
The survey also predicts that completion levels of new homes in 2008 are about to hit the lowest level since 1924. Against 207,000 completions in 2007, it is predicted there will be 148,000 completions this year and 142,000 in 2009.
However, the HMR sees "glimmers of light"- including the prospect of falls in oil and commodity prices, a possible fall in Bank base rate, and even a Government package to help the housing market - in the Chancellor's Autumn Pre-Budget Report.
:: IS RENTING THE BEST ANSWER FOR OWNERS WHO CAN'T SELL?
Many owners who have tried without success to find a buyer for their home are deciding to rent the property out in the hope that rental income will cover costs until the market picks up.
"A number of them are missing out on opportunities to let by refusing to budge at all on the asking rent, instead settling for void periods which every professional landlord knows is seriously detrimental to yields."
The big problem for many temporary 'amateur' landlords is that they do not anticipate costs involved when tenants demand various improvements.
"The drip-feed of costs from a rental property can come as a shock to many homeowners, who are not used to being forced to upkeep their property to high standards as part of a contract. They are also often unprepared for admin costs arising from contracts and inventories," Hilton says.
Hilton is currently devising a guide document for amateur landlords seeking tenants
However, buy to let expert and blogger
"For each millionaire today, there were many back then who 'had a go' at being a landlord, had a bad experience, and then gave up and cried off hurt.
"Once again, we will see many novice accidental landlords sign up with lettings agents to find them a tenant", he says.
"Nothing wrong with using an agent, but they will happily sign contracts with the lettings agent where they will end up paying big letting agent fees forever, and long after the agent has found them a tenant."
Lawrenson claims "high and ongoing renewal fees" have become standard practice among agents in
"And quite a few will adopt a Rigsbyesque approach to being a landlord which will ensure they quickly lose their good tenants and end up with someone far less suitable."
Insurers should also be told when a home is rented out. New rules from April also require the tenants' deposit to be lodged with a landlord deposit scheme.
:: INFORMATION: Cluttons (01865 261 261);
