Higher mortgage payments and the increasing cost of living are being blamed for a rise in the number of repossessions in the UK. Unfortunately the outlook for 2008 looks rather gloomy as this trend looks set to continue. Experts are calling on the Government to take further steps to help struggling homeowners.

According to the latest quarterly figures from the Ministry of Justice (MoJ) 38,688 mortgage possession claims were issued in the first quarter of 2008. This is 16% more than the first quarter of 2007 and 7% higher than in the fourth quarter of last year.  

27,530 mortgage possession orders were also made, 17% more than this time last year and 9% higher than in the fourth quarter of 2007. However 47% of mortgage possession orders were suspended, this is the same as the first quarter of 2007 and and 1% less than the fourth quarter of 2007.

The MoJ figures report how many possession proceedings have been issued and how many orders for possession have been made by the county courts. They do not reflect the number of actual repossessions made as many are not enforced.

Figures published by the Council for Mortgage Lenders (CML) do show the actual number of repossessions that have been made. These paint a depressing picture. Total repossessions reached 27,100 in 2007. This year CML is predicting a dramatic rise of 0.38% to 45,000 repossessions. But it says while this is higher than last year, it is still very modest in relation to the overall size of the UK mortgage market of 11.8 million mortgages. The organisation is tracking arrears and possession rates closely and says, to date, they are running within this forecast.

The RICS (Royal Institute of Chartered Surveyors) agrees with the CML. "Today's repossession numbers emphasise the difficulties that some homeowners are having in meeting their mortgage payments. This difficulty may be exacerbated over coming quarters if people who want to re-mortgage find it hard to secure an affordable rate on their new deal. We continue to believe that repossession themselves will increase to around 43,000 in 2008, still well below high the low point of 76,000 in 1991,” says David Stubbs, RICS Senior Economist. He adds: "The government should consider investigating ways to lessen the impact of repossessions by providing better support and financing for housing associations to take action when families are at risk."

Just hours before these latest figures were published the Government did announce plans to help homeowners struggling to pay their mortgages. These include improving debt advice and providing more free legal advice for those at risk of repossession.