Repossession rate soars in North Devon

By awilshaw

HOMEOWNERS in North Devon are increasingly likely to face destitution because they cannot afford mortgage repayments, new figures reveal.

The number of home repossession claims heard at Barnstaple County Court — which hears cases from across the district — has spiralled at more than three times the average national rate.

There were 154 mortgage repossession claims heard in Barnstaple in the first two financial quarters of 2008 — which was 52 per cent more than in the same period in 2007. The number of mortgage repossession orders (another stage of the repossession procedure) rose by 58 per cent to 103.

In 2007, the last full year for which figures are available, there were 224 claims and 138 orders in Barnstaple.

North Devon MP Nick Harvey said: "This rise is not surprising to me because we have got the lethal combination of high property prices and low incomes, so it is the sort of area that will run into problems quite quickly. It is something the general economic situation will lead to."

North Devon, which has average salaries of £17,000 and average property prices of £200,000, is suffering one of the most severe increases in repossession cases in the country. By comparison, in England and Wales overall claims have increased by 17 per cent and orders by 21 per cent.

Following years of unparalleled borrowing, the credit crunch has sent the economy into a tailspin. House prices are falling, household bills are rising, and borrowers are increasingly in danger of falling into arrears.

Families facing homelessness was a problem likely to get worse, according to Phil Davey, manager of the Barnstaple Poverty Action Group (BPAG).

He said: "We live in an economy in North Devon where people live very close to the margins financially. We have been seeing many people suffering with high levels of personal debt."

National repossession rates are 82 per cent higher than in 1987, although the number has fluctuated; there were 110 repossession claims and 91 orders in Barnstaple in 1987 and that rose to 489 claims and 351 orders in 1991. Repossession rates fell as the economy recovered, reaching a low in 2003, with 123 claims and 76 orders.

Local trends reflect the national situation, with 1991 being the worst year since 1987 for repossessions and case numbers dropping significantly during the early 'noughties' credit boom.

The homelessness charity Shelter accused mortgage lenders of using repossession as the first rather than the last resort. Chief executive Adam Sampson said: "Every day Shelter is seeing more and more ordinary hardworking people who are terrified of losing their homes. They're being punished by rising household bills, escalating fuel charges and food prices that are going through the roof."

North Devon Council said: "We are exploring early intervention services, such as a mortgage advice phone line, and considering mortgage rescue schemes. We have also received funding from central government to provide a joint court desk service with Citizens' Advice Bureau, which is expected to be operational in six weeks."

If you are struggling with repayments, you should ask your lender for help; repossession can be avoided in most cases. You can also get advice from your local Citizens' Advice Bureau or by visiting www.citizensadvice.org.uk