According to the Government, a total of 46,750 properties in the UK were repossessed during 2008, which means thousands of homeowners and mortgage lenders lost out: because repossession is bad news for everyone.

The Financial Services Authority, the Government's finance watchdog, has reported a sharp increase of 68% in the number of properties repossessed in 2008 compared with 2007. The regulator’s results also showed a rise in the number of borrowers falling into arrears, up 31% from 2007 to 377,000 at the end of 2008. The number of properties being taken into possession during Q4 2008 was slightly lower than it had been over the previous quarter, but this was still 60% up on Q4 2007.

Roderick Logan, analyst at Datamonitor says: “For borrowers it means losing one’s home and could mean moving to fairly squalid living conditions. For lenders, taking possession of a property is likely to be followed quickly by an auction, where prices are likely to remain below the estimated market value as bidders are looking to make a profit and lenders will have no choice but to sell.

"For the government, there is the political aspect of families losing their homes and the negative press generated if they are perceived to be standing by and allowing it to happen. This has resulted in a raft of government initiatives that are being rolled out to help those borrowers deemed to be most at risk."

So this is bad news for everyone. So everyone needs to work together to avoid it. And this starts with you, the homeowner. If you are struggling with unsecured debts and bills, you need to talk to your adviser as soon as you can because missing bill payments should be the red alert warning sign. You should also talk to your lender and any local help services available to you, like Citizen's Advice.

Just do something. Repossession is the worst thing that can happen to a homeowner, so don't let it happen to you and act before it's too late – no one wants to see you repossessed.

SOURCE: Datamonitor, FSA, 25/03/09

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