Local repossessions up a third in one year shows housing bubble is close to bursting - Burstow and Brake

6.00.00pm UTC (GMT +0000) Mon 7th Nov 2005

Latest figures uncovered by local MPs Paul Burstow and Tom Brake show a steep increase in the numbers of mortgage possession procedures issued in the local county court.

The number of possession actions entered into in the three months to September 2005 by Croydon County Court - which covers Sutton, Merton, Croydon, Bromley and Lambeth - rose to 565, up from 421 from the same period in 2004 - a rise of 34%.

The number of orders made in the three months to September 2005 rose to 168 from 126 - a 33% jump.

Analysis of the figures by the Liberal Democrats shows that across London a repossession order is made every 37 minutes and an action is entered into every 24 minutes.

Commenting on the figures Paul Burstow, MP for Sutton and Cheam, said:

"These figures are very disturbing. While they are at low levels compared to the early 1990's there are clearly big problems ahead.

"Banks and building societies need to ensure that when individuals take out mortgages they are fully aware of the risks that are involved and of the relevant insurance products."

Carshalton and Wallington MP Tom Brake added:

"At long last the Chancellor has now accepted there is a bubble in the housing market. Now he needs to recognise that for many homeowners it is sadly bursting and that he needs to take action.

"These figures demonstrate the complete absence of an adequate safety net in the mortgage market. The government needs to urgently look at the payment protection insurance markets as products are often over-priced and contain too many exemptions."

ENDS

Notes to Editors

1) Figures for repossession orders are sourced from the Department of Constitutional Affairs and are available at:

http://www.dca.gov.uk/statistics/mpstats/2005/reg-q3-t2.pdf

In this press release for suspended orders and orders made are combined as both entail the mortgage lender being granted possession of the property.

2) A brief an explanation of the three categories set out in the DCA figures:

• Actions Entered. A claimant begins an action for an order for possession of residential property by way of a summons in a county court.

• Orders Made. The court, following a judicial hearing, may grant an order for possession immediately. This entitles the claimant to apply for a warrant to have the defendant evicted. However, even where a warrant for possession is issued, the parties can still negotiate a compromise to prevent eviction.

• Suspended Orders. Frequently, the court grants the mortgage lender possession but suspends the operation of the order. Provided the defendant complies with the terms of the suspension, which usually requires the defendant to pay the current mortgage instalments plus some of the accrued arrears, the possession order cannot be enforced.