Repossessions increased by 54% in 2008 as 1 in 50 mortgages were in serious arrears, according to the Council of Mortgage Lenders (CML).
The latest figures paint a dire picture of the UK mortgage market, with millions of people struggling to meet their home loan repayments.
A total of 40,000 homes were repossessed during 2008, equivalent to 1 in every 290 mortgages and 54% higher than in 2007.
Furthermore, the CML expects repossessions to almost double in 2009, predicting as many as 75,000 possession orders will be granted.
The CML says its members are striving to keep people in their homes, but says many homeowners are willingly giving up their properties.
"There seems to be a sharp rise in cases where borrowers are handing back their keys or abandoning their properties," says CML director general, Michael Coogan.
"We strongly urge borrowers to contact their lender and work with them before taking this step, as there may be other solutions. Borrowers are still liable for their debt, even if they leave the property, so working through their problems is much more likely to be in their best interests."
Arrears have also surged, with 1 in 53 mortgages in at least three months or arrears, while 1 in 64 are in arrears of more than 2.5%.
The CML originally predicted a further 5,000 repossessions in the year, and says the lower than expected figure indicated mortgage lenders are following Government guidelines to minimise repossessions.
Contact: John Bakie, Tel: 020 7484 9805, e-mail: [email protected]IFAonline
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