Analysts predict a greater number of repossessions this year
Last year the Council of Mortgage Lenders predicted that the number of repossessions in the UK could reach as many as 75,000 over the course of this year, which is a worrying figure in itself.
However, a group of analysts has recently released a report claiming that the figure for repossessions this year could be even higher than this estimate from the CML, stating that repossession levels could rise to as many as 90,000.
The report from the consultancy CB Richard Ellis claims that for every half a million job losses that occur there will be around twenty thousand repossessions, and with job losses expected to soar this year as a result of the ongoing recession this could lead to a far higher number of repossessions than originally anticipated.
The report states: ‘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.’
The consultancy also blamed tighter credit conditions for the increase in repossessions, and it 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.’
Officials have said that those most likely to face the risk of losing their home over the course of this year include sub-prime borrowers, buy to let borrowers, and those with high levels of debt that are not equipped to deal with the economic downturn.
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