THE number of homes repossessed in Scotland rose by 65% last year, new figures show.

THE number of homes repossessed in Scotland rose by 65% last year, new figures show.

The Council of Mortgage Lenders (CML) said that although the UK total of 17,000 had more than doubled from 2005, it was broadly in line with levels seen five years ago. It compared with a low of 6030 in 2004, but would still be less than a quarter of a 1991 peak of 75,540.

It means that roughly one in 690 homeowners had their house repossessed during 2006. The CML said it did not have a specific breakdown of Scottish figures, but it is estimated more than 1000 homes were repossessed north of the border last year.

The CML also said the rate of property repossessions slowed towards the end of 2006, resulting in a lower annual total than the 18,000 anticipated.

But director-general Michael Coogan said the picture was set to worsen as the latest interest rate hike fed through.

He said: "The arrears picture at the moment is fairly complex. On the one hand, the wave of problems caused by previous interest rate rises has now worked through, so recently arrears levels have fallen. On the other hand, interest rates are rising again, and payment shock may be an issue for some this year as their existing fixed or discounted deals expire."

David Stubbs, senior economist at the Royal Institution of Chartered Surveyors (RICS), said: "Although repossessions continued to rise during the second half of 2006, the rise was slower than many had feared.

"These better-than-expected figures show that strong economic growth during the second half of the year helped take the pressure off household finances.

"We expect repossessions to rise further as the impact of the recent increases in interest rates takes its toll."

Adam Sampson, chief executive of homelessness charity Shelter, said: "Mortgage arrears and repossession problems seen by Shelter have more than doubled in the last two years, and we received more than 70,000 hits on our repossession websites in 2006.

"We are calling on mortgage providers to be more responsible, particularly when lending large sums of money to vulnerable people on low incomes, and urging the government to increase support to help families keep a roof over their heads."

Shadow Chancellor George Osborne said: "Despite the Chancellor's boasts about the economy, people's incomes are failing to keep up with the rising cost of living. No wonder the Chancellor is so keen to move next door to Number 10 before the truth about the economy catches up with him."

Liberal Democrat finance spokesman Vince Cable said: "These are very worrying figures, but they still understate the severity of the problem."