Home repossessions up 15% during 2009 - FSA

The number of people who lost their homes leapt by 15% during 2009, figures showed today.

The Financial Services Authority said 54,055 people had their properties repossessed during the year, up from 46,945 in 2008.

But there was a fall in both the number of repossessions and the number of people who were unable to keep up with their mortgage during the final quarter of the year.

Around 11,800 homes were repossessed during the final three months of 2009, 15% fewer than during the previous quarter.

New arrears cases also fell by 9% during the three months to 41,000, after steadily declining throughout 2009.

A total of 378,000 borrowers had fallen behind with their mortgage by the end of the year, the equivalent of 3.42% of all mortgage customers.

The figures are broadly in line with ones reported by the Council of Mortgage Lenders for 2009, which showed that 46,000 people had their home repossessed during the year, the highest level since 1995.

The FSA's figures are higher than the CML ones, as they also include second-charge mortgages and loans advanced by lenders who are not CML members.

However, the level of repossessions reported by both groups are lower than was originally predicted, with the CML saying at one stage that up to 75,000 people could lose their homes during the year.

A combination of low interest rates, increased lender forbearance and the introduction of Government schemes to help people struggling to keep up with their mortgage has helped to keep repossession figures lower than forecast.

But the FSA figures contained little cheer for potential first-time buyers who are struggling to raise the deposits they need to buy a home.

The regulator said only 2% of mortgages were advanced to people borrowing more than 90% of their home's value during the final three months of 2009, down from 6% during the fourth quarter of 2008.

Advances to people borrowing both a high proportion of their property's value and a high income multiple also continued to fall to less than 1%.

New lending to all borrowers totalled £41 billion during the final quarter of 2009, 2% more than during the previous three months, but 8% lower than a year earlier.

Meanwhile the Government announced a further £2.5 million of funding for its advertising campaign encouraging homeowners in repossession hotspots who were struggling with their mortgage to get help.

Housing Minister John Healey said: "With the pressure on homeowners set to remain throughout 2010 we must keep the Government support in place."