MORE homeowners are facing financial misery, with new figures showing repossession orders in Peterborough increasing at a rate three times the national average.
Figures from the Ministry of Justice reveal courts made 250 home repossession orders in Peterborough during April, May and June – nearly twice the number recorded in the same period in 2007.

It brings the total number of repossession orders in PetADVERTISEMENTerborough for the first six months of the year to 465 – an increase of two-thirds on the first half of 2007.

The rise is almost treble the average year-on-year increase across the country and has sparked fears city householders are being hit harder by rising domestic bills and more expensive mortgages.

Staff at Peterborough's Citizen's Advice Bureau (CAB) say many more people are seeking help for debt problems than they were 12 months ago.

Financial specialist Nigel Barnard said the bureau's mortgage specialists dealt with 15 people threatened with repossession last week alone.

Its weekly debt advice clinic in Westwood, Peterborough, which last year attracted no more than six people, has been attended by more than 40 in the last three weeks.

Mr Barnard said: "We have been inundated with requests from people seeking advice about a variety of debt problems. We are probably seeing 50 per cent more people than we were this time last year."

CAB manager Keith Jones said rising utility and fuel bills, combined with many people coming off fixed- rate mortgages of four to 4.5 per cent, and having to pay rates of seven to 10 per cent, were fuelling the problem.

He said: "Whichever way you look, people are being hit financially by massive increases.

"People tend to live up to and beyond their income. When things go wrong, they still want to go out socially, buy new clothes and new cars.

"They don't think that if the mortgage or credit card does not get paid that they could lose the roof over their heads."

Chairman of Peterborough Chamber of Commerce Iain Crighton said: "It is disappointing news.

"Peterborough has a very high proportion of people on low incomes and it is difficult to absorb the rising cost of household bills."

Norwich and Peterborough Building Society spokeswoman Laura Hogg said: "Although the figures look negative, it's worth remembering that these are the number of repossession orders made by the courts, not the actual number of repossessions made.

"Although many people are feeling the pinch as the credit crunch continues to hit, we haven't actually seen an increase in repossessions compared to this quarter last year."

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Repossessions are on the rise across the county – and the worst may be yet to come, say housing experts.

More borrowers are struggling to keep up with higher mortgage repayments brought on by the credit crunch across the county’s eight districts – apart from in Maidstone and Ashford.

According to the Ministry of Justice, the number of mortgage possession claims issued in Ashford has dropped 21 per cent in the second quarter of this year compared to the same period in 2007.

But in Tunbridge Wells 22 per cent more homeowners’ properties are facing repossession.

John Oakley, chairman of the east Kent branch of the National Association of Estate Agents, predicted worse may be to come.

“The credit crunch has not really hit them yet and from the end of September to December you might project higher repossession rates.

“I would not mind betting they would change at the end of September to December as the crunch starts to bite.

“People cannot afford their [mortgage] repayments and cannot sell because the market is just not happening,” he said.

The Council of Mortgage Lenders revealed the amount of homes being repossessed nationally has risen 48 per cent in the last year at the beginning of August.

Mr Oakley said he was surprised Ashford had bucked the national and regional trend for mortgage possession claims rising.

“If they had gone up then I would say it was because there is so much new building and promotion of high percentage mortgages that people cannot afford to live there.

“But this is a contradiction,” he said.

He speculated as to why Tunbridge Wells had seen such a sharp increase, suggesting the higher property prices in the area meant people had borrowed more to afford their homes and were now under increasing financial pressure.

“It is one of the more expensive areas in the county and if you are going to buy you have to have a good income or borrow more money which puts more pressure on maintaining that lifestyle.

“There’s a pressure to ‘keep up with the Joneses’,” he said. “These people bought into the good lifestyle, they go out to the wine bars and restaurants and are perhaps living beyond their means which is putting pressure on their disposable income.”

Medway has seen no change since last year, in Dartford there was a 16 per cent increase, Canterbury has seen a rise of 17 per cent and in Thanet the number of people at risk of losing their homes has increased five per cent.
The average rise in repossessions across the county is five per cent.

Judith Armitt, managing director of Ashford’s Future, which is responsible for the regeneration of the town that will see it double in size by 2031, said: “Ashford is attracting a growing number of well-paid, skilled jobs, which means those living and working in the town are managing to weather the storm.”
 
While the current downturn in the global economy, brought on by the sub-prime mortgage crisis, has left more Kent homeowners struggling this year than last the picture is much bleaker in other parts of the country.

Cambridgeshire, Norfolk and Suffolk showed a 29 per cent increase in the number of property owners facing repossessions compared to 13 per cent for the South East as a whole.
 

Stamp duty will be suspended for a year on properties costing less than £175,000 as part of the government's housing market recovery plan. It takes effect tomorrow.

The previous level for paying stamp duty was £125,000. The Nationwide Building Society reported in August that the average house in the UK cost £164,654.

The Nationwide Building Society’s chief economist Fionnuala Earley was reluctant to say if the stamp duty holiday would kick-start the housing market.

‘It may have some impact loosening chains at the bottom of the market but it is difficult to know what impact it will have because of consumer confidence and the worsening economy,’ she said.

Prime Minister Gordon Brown has slowly unveiled the first details of his £1 billion housing market rescue plan aimed to help first-time buyers and homeowners at risk of repossession.

The three-part recovery plan will include a mortgage rescue scheme, a new equity-based shared ownership scheme and will give housing associations more cash to build affordable homes. It comes after the chancellor Alistair Darling controversially warned this weekend that the UK faced the worst economic conditions for 60 years.

The mortgage rescue plan will be means tested by 'money advisers' from local authorities and will offer homeowners facing repossession three options:

Sell the property to a social landlord, clearing the debt and then renting it back;
Convert the property to shared ownership with a housing association; 
Let a social landlord buy a stake in the property through a shared equity scheme
‘We are determined to continue to do everything possible to promote long-term stability and fairness in the housing market,’ said Caroline Flint, housing minister. ‘The measures announced today will go significantly further in supporting families who may be facing difficulties at the moment, while ensuring we maintain our focus on delivering more affordable homes over the long term.’

The government will also launch a new £300 million shared equity scheme for first-time buyers called HomeBuyDirect in the autumn. Around 10,000 first-time buyers who earn under £60,000 could qualify for a five-year charge-free loan from the government and developers to cover up to 30% of the value of the property.

The recovery plan will create a £400 million pot for affordable housing schemes which could create 5,500 new homes over the next 18 months, according to the government. Local authorities will be allowed to apply for this grant alongside housing associations for the first time

The government has committed £100 million to a benefit package for homeowners falling behind on mortgage payments. By cutting the qualifying period for Income Support for Mortgage Interest benefit to 13 weeks from 39 weeks and raising the capital limit to £175,000 from April 2009 the government claims it will prevent 10,000 repossessions.

There has been confusion over the stamp duty holiday after remarks from the chancellor last month. Hazel Blears, the Department of Local Governemnt and Communities secretary, had declined to comment on the issue this morning.

A working Wigan mum who lost her home of 20 years in the credit crunch says she would have been better off staying on the dole.

Supermarket supervisor Julie Brogan, 39, returned to work and came off council benefits four years ago but has ended up living with her teenage daughter in a caravan at a friend's house in Kingsley Avenue, Worsley Mesnes.

After the credit crunch left her struggling to meet her soaring mortgage repayments, she got into arrears but found a company prepared to buy the property and rent it back to her.

But Julie was shocked when a judge granted a repossession order on August 6 at Wigan and Leigh Magistrates Court, refusing to give her an extra 14 days to get the documentation sorted.

Julie said: "It feels like it pays to stay on the dole. Perhaps some people might say it's my own fault but I wanted to make a go of things and stand on my own two feet. After the fixed rate ended on my mortgage, I started to struggle.

"When I showed the judge a letter from the finance company agreeing to buy and rent back the house, she said because there was nothing signed they could potentially back out within the 14 day cooling off, so I asked them for 14 days.

"The judge said 'no', looked at the clock on the wall and said I won't keep you because the eviction is going ahead and you have only have an hour to get some belongings out before they change the locks. I was devastated.

"A home I had lived in for 20 years had just been taken from me on the say-so of this judge. The house was put up for sale but it is still empty.

"In this credit crunch, when houses are not selling, why have we ended up on the streets when it could have all been avoided with just a bit of understanding?

"If I'd stayed on the dole, I would still be in my home."
She believes mortgage lenders and the courts are using repossession too readily rather than as a last resort and she believes more support should be given to struggling home-owners.

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Stafford has emerged as one of the fastest-growing areas in the country for home repossessions, according to the latest statistics.

The affluent town might have been expected by most people to weather the credit crunch better than its less well-off neighbours.

But new statistics show that over the past few months, repossessions have exploded by more than 70 per cent, prompting fears of an increase in homelessness in the area.

With hundreds of families potentially losing their homes, the development also means local housing waiting lists could be made much longer. Council chiefs say they are helpless to address the problem as private borrowing is outside of their control.

However, they have pledged to support any local families facing the trauma of losing their homes in the current economic climate.

The Ministry of Justice figures published yesterday show that between April and June, there were 120 new repossession cases in Stafford, representing a staggering 71 per cent increase on the same period last year.

Worryingly, the new statistics also show a massive increase on the previous three months, which was already up on last year. Between January and April, 65 new orders were made – an increase of 25 per cent on the same three months in 2007.

The figures have also prompted the Legal Services Commission, the Government body responsible for providing legal aid, to set up a new scheme based at Stafford County Court.

Speaking today, Councillor Patrick Farrington, Stafford Borough Council’s portfolio holder for housing and communities, said: “In terms of mortgage repossessions, obviously they are related to houses outside the borough’s control – they’re individuals with private mortgages.

“From my perspective there is very little the borough can do in relation to the cause of that. But my team at the council provide a first-class service in terms of getting people to come to terms with the dreadful aftermath of a repossession.

“It’s one of the most traumatic things that can take place but they are there to help and advise in terms of rehousing and help with the points systems.”

In July, Stafford councillors anticipated a big increase in the number of people needing help with re-housing and a full meeting of the borough council approved a homelessness strategy for the next five years.

Councillor Farrington said the strategy would need to be “fluid” to cope with the difficulties with rising mortgage interest rates.