The number of homeowners facing repossession orders, after failing to keep up with mortgage payments, rose by 17% in the first quarter of 2008 according to the latest report by the Ministry of Justice. There were 27,530 orders made up compared to 23,438 in the same period of 2007. The credit crunch has led to more expensive repayments for new mortgages and a reduction in the availability of deals.

The number of mortgage possessions claims - the first stage of the repossession process when homeowners are threatened with action - was also up. There were 38,688 claims in the first three months of the year, a rise of 16% over the same period last year and 7% higher than the final three months of 2007. Most of these do not end up with a property being repossessed, mainly because the borrower presents the court with a case for not proceeding or the lender comes to an arrangement with the borrower.

The number of actual repossessions across the UK and by private lenders only is shown in figures from the Council of Mortgage Lenders published twice a year. The data for the first half of 2008 will be published in August and it is predicted that there will be 45,000 repossessions in 2008 up from 27,100 in 2007. The CML reports that there are 11.8 million outstanding mortgages in the UK with thousands struggling having taken on mortgages that they cannot afford. The recent increase in the cost of food and fuel has resulted in tighter household budgets and the reduction in the amount of credit available is also a factor in the current situation.

These figures are released on the day the government has given details of plans aimed at helping homeowners who are struggling to pay their mortgages including more free legal advice for those at risk if repossession.

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Article referenced from http://news.bbc.co.uk/1/hi/business/7391772.stm