THE credit crunch is beginning to bite in Peterborough with the number of repossessions rising by 12 per cent as some homeowners struggle to make ends meet.

Government figures reveal that 261 mortgage possession claims were issued in the first three months of 2008, compared to 234 for the same period last year.

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Meanwhile, the number of landlord possession claims, which is when a landlord takes a property back from a tennant, rose by 30 per cent to 283 – at an average of more than three a day.

The figures reveal that an increased number of Peterborough residents are facing financial problems as they attempt to juggle hefty mortgage payments with soaring food and fuel bills.

Today, special services manager at the city's Citizens' Advice Bureau (CAB) Tracey Hamilton-Keyes warned that "anybody and everybody" could be at risk of having their home repossessed.

She said: "The people we are seeing are families who, for whatever reason, have got themselves into financial difficulty.

"It may been triggered by unemployment or sickness, but once that happens, they struggle to pay back high monthly instalments that could be on 100 per cent, or even 110 per cent, mortgages.

"It isn't just people who are having difficulty with monthly mortgage payments, but also those who have rent arrears."

Pointing the finger at "irresponsible lenders", she added: "Peterborough has a high cost of housing, but a relatively low level in terms of wages. It's a lose-lose situation. It means any changes to household earnings has a huge impact on the ability to pay the mortgage."

A "typical case" that the CAB has dealt with recently is a Peterborough man whose £1,350 monthly salary had to cover a £950 mortgage.

It left the man with just £400 of disposable income to spend on council tax, fuel bills and food.

Partner at Hegarty LLP solicitors Kally Singh said: "When the economy hits a bad patch, generally the number of mortgage possession claims increase.

"It is interesting that Peterborough has a higher number of landlords seeking action. It may be due to there being more rental property. Perhaps as the number of immigrants in the city has risen so has the need for more rental property.

"It also shows that landlords are now taking action more quickly if their tenants fall behind with their rent. Landlords are under more pressure and anxious not to fall behind with their mortgage payments.

"Landlords often assume that a buy-to-let property will be self-financing. However, if a tenant does not pay their rent, the landlord can end up paying the mortgage on the rental property out of their own income."

Owner of Peterborough-based Belvoir Lettings Terry Lucking concurred that homeowners who had purchased a number of houses to rent were feeling the pinch.

He said: "It is having a double impact – both on the landlord and the tenants who have to move out because the home is repossessed.

"At the end of the day, we are in part of an economic cycle which is on the decline.

"People should seek advice as soon as they have a problem, whether they are a homeowner or tenant."

Related tips: What to do if you fall behind

Repossession figures
Date - Mortgage possession claims issued - Landlord possession claims issued

• January to March 2008 - 261 - 283


• October to December 2007 - 260 - 187


• July to September 2007 - 236 - 208


• April to June 2007 - 241 - 195


• January to March 2007 - 234 - 217


• October to December 2006 - 205 - 160


• July to September 2006 - 226 - 177


• April to June 2006 - 253 - 169


• Ministry of Justice figures