With many home owners struggling to meet their mortgage repayments it is hardly surprising to see that repos are still high, 46,000 or so for 2009, according to the Council of Mortgage Lenders (CML). In fact I think the number, in reality, is even higher!

Although the statistics are collected correctly by the Council of Mortgage Lenders (CML) and the Ministry of Justice (MoJ) in my view they do not accurately reflect current market conditions and I believe the problem is far greater than it appears.

Looking  at the broader picture and I can  offer some very valid reasons why figures are nearer to those of the last big house recession back in 1991 when 76,100 homes were repossessed. Here are my thoughts;

No one has taken into account the number of homes being sold by families to private landlords, under 'Sale and Rent back’ (SAR) schemes, or flash sales. The Office of Fair Trading (OFT) said back in October 2008, ‘It is likely that there are upwards of 1,000 firms, together with an unknown number of non-professional landlords, who have conducted about 50,000 transactions to date’. 

Since that announcement some 16 months ago the SAR industry has gathered momentum leading to the intervention of the Financial Services Authority (FAS) and full regulation being implemented this July, rightly so in my opinion. 

Based on the OFT figures and on increasing consumer awareness of the SAR scheme I estimate that the number of homes sold under SAR in 2009 is nearer the 25,000 mark. 

Another damning factor is that the CML only collects the number of first charge holder repossessions. There are no records of how many second charge holders, usually secured loans that are repossessing homes. How many are there of these that the CML do not know about? 

What is more is that the introduction of the Mortgage Pre-action Protocol in 2008 could be a delaying factor in eventual repossession for some home owners.

The latest annual Moore Blatch 2010 repossessions report, reveals that 67% of mortgage lenders and repossession experts are predicting an increase in the number of repossessions in 2010.

Paul Walshe, Head of Lender Services, Moore Blatch, says: “The Council of Mortgage Lenders revised, and subsequently lowered their 2009 predictions for repossessions from 75,000 down to 48,000.

“However, much of this fall was due to the implementation of a government initiative to provide consistency in lenders’ approach to repossessions; the Pre Action Protocol, as it is known. This created a bottleneck which will start to clear in 2010”.

That aside I now have another argument to throw at you; that the data put out by the CML is technically out of date; yes ….they can record previous repossessions but what about the future?

My point is that it can take between 6 and 12 months to have a home repossessed, even longer now with the introduction of various government backed schemes, and the figures released are based upon house holders who experienced difficulty up to almost a year ago. 

So all those home owners that are missing the first payment this month and can no longer meet their mortgage payment, in theory will not surface or appear on the CML register until late this year if not next year!

I know of many families that are paying the mortgage using redundancy payments or relying on family or friends to help make ends meet. Not only that but recent research by Shelter threw up a shocking statistic; one million householders have used their credit cards to pay their mortgage or rent over the past 12 months. This represents 6% of all the homes in the UK, and 1 in 12 Londoners.

At a time when the government is offering several schemes to help people keep a roof over their heads it is of real concern that consumers are resorting to this means of payment, which, often at an interest rate of 19%, is total madness!

On the positive side those on Standard Variable Rates (SVRs) are benefitting form historically low interest rates and I hear that many consumers are paying over the top each month to get their mortgages down. Equally there are some that have been saved from repossession as low interest rate have resulted in their normal monthly mortgage payment being reduced, for example, from £1800 to around the £450 - £600 mark.

Those mortgage holders on SVRs are dreading the end of this honeymoon period and with many economists forecasting higher inflation this year, one way the Bank of England is likely to respond is to increase interest rates. I do not accept that the house repossessions are falling; to the contrary, once you clear the smoke and look through the mirrors then you can’t help feel that someone has been spinning a good yarn.