Repossession orders increase

Compared to the same quarter in 2005, the number of English and Welsh court orders to repossess a house increased by 57 per cent to nearly 22,000.

According to the Department of Constitutional Affairs figures, repossession levels have been rising since the middle of 2002 and have increased rapidly since the start of 2005.

The Royal Institute of Chartered Surveyors (Rics) believes an increase in the interest rate between 2003 and August 2004 is one principal reason for this as it would increase the amount that homeowners had to repay each month.

The rise in unemployment is also to blame and the fact that average debt levels have tripled since 2000 is not likely to have helped.

Despite this, Rics points out that Bank of England figures show that rates for a five-year fixed mortgage are at a low of a 5.11 per cent average.

However, actions entered by lenders – the first stage of repossession – were at their highest level since 1992, rising by 29 per cent over the past year to 33,442.

With an increase in the interest rate expected later in the year, Rics expects repossession numbers to continue to rise.