The number of court actions for home repossessions has risen toits highest level in 12 years during the past three months, ashouseholds struggle to cope with escalating debts.
The number of repossession applications in the three months to theend of September stood at nearly 30,000 " a rise of 55 per cent onthe same period last year " according to the Department forConstitutional Affairs.
Court orders made during this period " granting a warrant forpossession " went up 66 per cent from 11,862 to 19,867.
But, disturbing as they are, these figures do not reflect the truenumber of households in financial difficulty, because lenders andhomeowners often negotiate a compromise to prevent eviction.
However, figures from the Council of Mortgage Lenders (CML) showedthat the number of homes actually repossessed in the first half ofthis year rose to 4,640 " up from 3,070 in the previous six months.
Lenders have blamed rising interest rates for the problemsthousands of homeowners are facing in meeting their monthly mortgagerepayments. Although the Bank of England cut its lending rate to 4.5per cent in August, the cost of borrowing rose from 3.5 per cent to4.75 per cent between November 2003 and August 2004.
Chris Holmes, chief executive of the debt advisory service AllClear Finance, warned that many people with serious debts were atrisk of losing their homes. 'Those facing debt problems needappropriate advice and should seek it as soon as possible,' he said.
Loans
Lenders give poor families a raw deal
Low-income households could be paying too much for loans, newfindings show.
The home credit industry supplies loans to those who are onlimited incomes, or who may have difficulty getting other forms ofcredit. Repayments are then collected in instalments from thecustomer's home.
Last week, the Competition Commission (CC), which is involved inan inquiry into the sector, said there was little evidence ofcustomers switching between providers, or of price falls as a resultof competition in the market.
In its preliminary report, the CC said home credit customersappeared 'generally happy' with the loans they received " but thatthey paid a high price for them.
'Various factors appear to point towards a lack of effectivecompetition, which may mean home credit customers pay more than theyshould,' said the CC's acting chairman, Peter Freeman.
The findings were welcomed as 'extremely positive and encouraging'by the National Consumer Council, which sparked the inquiry last yearwhen it launched a 'super-complaint' to the Office of Fair Trading.
This showed clear evidence of the damaging impact of high interestcharges on disadvantaged families, and highlighted a lack ofinformation on costs and alternatives.
Claire Whyley, spokes-woman for the National Consumer Council,said: 'We hope [this inquiry] will lead to a fairer deal forBritain's two million poorest people who use home credit to make endsmeet.'
The bulk of the home credit market is in the hands of fourproviders, raising concerns that this makes the industryuncompetitive.
Online fraud
Internet users urged to put safety first
Internet users who shop, bank and communicate on the web are beingtargeted in a new campaign aimed at encouraging people to protectthemselves against online crime.
The online retail economy is worth pounds 10bn a year, and 14million people use internet banks. With these figures in mind, theGet Safe Online campaign (www.getsafeonline.org), launched lastThursday, is urging users to take the threat of spam mail, virusesand online fraud more seriously.
A report accompanying the launch shows that more than three-quarters of internet users don't know enough about protectingthemselves, and that four in 10 rely on friends and family for onlinesafety advice.
But while one in five claim to be more concerned about internetcrime than crimes such as car theft and mugging, the same proportionadmit to opening suspicious files from unknown sources " which couldcontain viruses.
The campaign is a joint initiative between the Government, theNational Hi-Tech Crime Unit (part of the National Crime Squad) andcommercial organisations that conduct business online, including BT,Dell, eBay and HSBC.
John Hutton, the cabinet minister responsible for e-government,said the internet had become an 'essential tool for businesses andconsumers'.
But he added: 'While it has brought enormous benefits, we knowthere are risks too. We want to make the internet a safer place tomake financial transactions and exchange personal information.'
Household security
Claims rocket on fireworks night
Homeowners are being urged to take extra safety precautions on 5November, which is said to be the worst day of the year forburglaries.
The insurer Norwich Union (NU) reports that claims for theft onbonfire night can be 20 per cent higher than average. It sayscriminals take advantage of properties left empty while people areout at organised firework displays, or even in their gardens. To makematters worse, the noise of fireworks can mask any sounds of forcedentry.
In addition, the insurer warns that people often neglect homesecurity more generally. For example, more than a quarter ofhouseholders do not lock their front door when at home.
Accidental damage also leads to a sharp rise in claims onbuildings and contents policies at this time of year. ChurchillInsurance found that nearly two million people in the UK had reporteddamage to their home or car as a result of fireworks going astray.
Homeowners are urged to check they are adequately covered againstaccidents.
James Harrison of the price comparison service Insurancewide.comadvised householders: 'Your home contents policy should cover you foraccidental damage caused by fire to anything in your garden,including the shed " or any damage you cause to your neighbour'sgarden. But insurers emphasise you should exercise due care andattention.'
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