The Council of Mortgage Lenders (CML) have released new figures showing a dramatic rise in the rate of home repossession, with 48% more properties taken into repossession in the first half of the year compared to the same period in 2007. In total, 18,900 homes were seized.

The number of mortgage payers in arrears was also up sharply, rising 29% to 155,600.

While the CML acknowledged that the figures were likely to continue to get worse, a spokesperson stressed that the number of homeowners facing real problems was still small when compared to the 11.75 million open mortgages in the UK, and that the hardest hit mortgage payers were those with sub-prime deals which have become more expensive  and harder to obtain because of the credit crunch.

The latest figures show a slight fall in personal insolvencies, with 24,553 people declaring themselves insolvent in the second quarter of the year. This is a 2% fall on the first quarter, and over 8% less than the same period in 2007.

Although the figures appear to be bucking the predicted trend, it’s thought that the credit crunch may be paradoxically responsible - credit has been harder to find, and people are more conscious of the effects of borrowing, leading to fewer people taking on more than they can afford.

It remains to be seen whether this effect will last, although most experts still expect a surge in insolvencies over the coming months and years.

A new report predicts that 1.7m mortgage payers could face negative equity within the next year, as house prices continue to slide.

Credit ratings agency Standard & Poor (S&P) predict that prices will fall a further 17% over the next year, resulting in 14% of UK mortgage holders finding that their home was worth less than their outstanding mortgage balance.

The current number of households in negative equity is around 70,000 or around 0.7% of homeowners.

New figures from the Council of Mortgage lenders make uneasy reading for mortgage payers struggling to make ends meet, with a 21% rise in house repossessions last year compared to 2006. In all, 27,100 homes were seized, up from 22,400 the previous year.

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Three leading debt advisory companies have been warned over their ‘misleading’ adverts, and told by the Advertising Standards Authority (ASA) that they should not repeat the ads.

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Debt charities say that the number of people contacting them to discuss their debt problems is continuing to rise, with more people worried about severe difficulties such as mortgage arrears and repossession orders.

The Consumer Credit Counselling Service reported a 33% rise in enquiries in the first quarter of 2007 compared to the same period in 2006, while Citizens Advice also reported an increase.

Payday loans can seem like an easy way out of temporary financial problems, giving you a lifeline to cover your bills until your next payday. There’s a darker side though that not many consider until they’ve experienced it for themselves: payday loans are addictive.

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It’s an accepted fact that personal debt has risen to almost unsustainable levels, and that the number of bankruptcies and IVAs (individual voluntary arrangements) is reaching record highs. Some commentators put this down simply to the financial ignorance of many people, or the irresponsible ‘buy now pay later’ culture they say has developed.

That’s perhaps a little harsh on the millions of people for whom debt is now an ordinary part of life. There are several contributing factors which have led to today’s debt problems.

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