Hundreds face losing homes

THE number of people in Derby at risk of seeing their homes repossessed has soared as the credit crunch begins to bite.

A total of 327 people had possession orders made against them in Derby's county court in the third quarter of this year, compared with 184 in the same period last year – an increase of 78%.

The rise was the highest in the Midlands, which saw an average increase in repossession cases of 16%.

Housing campaigner Philip Brooks-Stephenson said: "We know the number of repossession orders has gone up and evictions have gone up and there is a particular problem in Derby.

"The economic crisis is having a direct impact on homelessness."

Housing Minister and Derby South MP Margaret Beckett said: "I do find it surprising. An increase had been anticipated in most places, though there do seem to have been a particularly high number in Derby.

"Though I haven't had a chance to see the detail yet, it may be that Derby had a big percentage rise because it started from a low base.

"However, we are doing everything we can to encourage lenders to be reasonable and not resort to repossession unless it's absolutely impossible.

"Things are also being put in place to help the most vulnerable families, though that may take a little time to come through.

"We also have good advice centres set up for people. If people think they might be at risk, then they should go to them immediately for help."

In 2006, there were 114 repossession orders issued at Derby's county court. In 2005, the figure was only 84.

The orders can be suspended, meaning not all lead to repossessions, but they are the start of formal proceedings to allow mortgage lenders to reclaim homes where owners have failed to keep up repayments. About half of these end in repossessions.

Mortgage adviser Jason Kavanagh, director of 2 Plan Wealth Management, said banks and building societies needed to help clients.

He said: "I think the banks have to be more flexible with payments and use repossession as a last resort. They are feeling the pressure but they got themselves into a situation with over-lending and now they need to work to get out of it.

"Equally, I think people who are struggling with repayments need to speak to their lender as early as possible because that way they are more likely to be more flexible.

"I also think lenders should be forced to pass on the interest rate cuts, which many have not done."

The Ministry of Justice has brought in new rules this week which mean lenders will be expected to be able to demonstrate to courts that they have tried to discuss and agree alternatives to repossession when borrowers get into trouble with their repayments.

It has also expanded free legal representation in county courts for householders at risk of repossession.

Derby's own housing options centre, which advises people who are at risk of being repossessed and becoming homeless, said it had noticed an increase in the number of people asking for help.

Manager Lisa Callow said: "We have seen the figures go up in the last quarter, and that is just people who approached us.

"There will be others in the city who haven't approached us who might be renegotiating on their own with their lenders."

Derbyshire Housing Aid, which runs an emergency shelter in Green Lane, said it had seen the number of people it was having to turn away each night rise steadily over the past few months.

In October, it had to turn away 60 people.

And its Have a Heart Appeal, which is being run to raise money to help people who will be homeless this Christmas, said the credit crunch was also meaning fewer people were donating money.

Mr Brooks-Stephenson, spokesman for the appeal, said Derby could be seeing higher figures than other areas because it already had existing problems with housing.

"We know already that Derby is the fifth most deprived area within the East Midlands and we know there are severe housing problems which lead to homelessness. That has been recognised nationally.

"Derby suffers more than other areas with housing problems and homelessness so if it was ever going to be a problem with mortgages and housing and the knock-on effects in the mortgage market, Derby would be the first to get hit because it is already suffering problems."