US home foreclosures increase 55%

More than 272,000 people in the US received a foreclosure notice in July, a rise of 55% on a year earlier, according to analysts Realtytrac.

Florida and California had the highest rate of foreclosures, figures showed.

In a further indication of the severe problems affecting the US housing market, more than 77,000 homes were repossessed in July.

As a result of this increase, 17% of all homes for sale in the US are repossessed properties.

US mortgage giant Fannie Mae recently announced that it was opening new offices in California and Florida to try to increase the sale of foreclosed properties it owns. It is even considering selling them in bulk to investors.

Last month, the US government introduced new legislation to try to prevent homeowners losing their properties.

Realtytrac said this could help the number of foreclosures start to stabilise as early as the first quarter of next year.