Repossession levels set to rise according to analysts

A group of analysts has recently predicted that the level of repossessions this year could soar to around 90,000. Several months ago the Council of Mortgage Lenders predicted that repossession levels could rise to 75,000 over the course of this year, but the newest prediction means that levels could rise higher than had been expected previously.

One industry official said: ‘Loss of income through unemployment is the major contributory factor towards arrears and repossessions. Although the fear of losing one’s home means property owners do all they can to cover the mortgage payments, it can be increasingly difficult for the jobless to cover mortgage payments, particularly as government support does not kick in until 13 weeks after the job loss.’

A report went on to state: ‘High mortgage rates are a particular problem for borrowers coming to the end of their current mortgage deal. These homeowners are finding it difficult to obtain a mortgage on comparable terms and may not be able to afford the higher rates. There are a large tranche of vulnerable borrowers which could increase the severity of the problem.’

Sub-prime borrowers with poor or no credit, along with buy to let investors and those with high debt levels are expected to face the worst of it according to the reports.