Home repossessions have risen by around 30 per cent as borrowers fall behind with their mortgage payments and interest rates rise.
The number of people losing their homes is set to hit the 45,000 mark next year according to the Council of Mortgage Lenders (CML). And researchers at Capital Economics are predicting that house prices could fall by as much as six per cent in some areas of the UK in 2008.
If this comes true, then Britain will see repossessions rise and house prices fall significantly for the first time since the dark days of the early 1990s.
The warning on soaring repossessions comes after five interest rate rises since the summer of 2006, and the problem could worsen because of the global credit crunch as lenders make it increasingly difficult for some people to remortgage.
The predictions have come as figures from the Bank of England – whose Monetary Policy Committee was meeting today to decide on whether rates remained on hold – showed numbers of mortgages approved for people buying a home fell to a two-year low during September.
This was the lowest level since July 2005 and at the same time property information website Hometrack said house prices were falling for the first time in two years, dropping by 0.1 per cent in October in the face of rises in the cost of borrowing and falling consumer confidence.
And thousands of first-time buyers are at risk of facing negative equity after a dramatic rise in the number of 100 per cent mortgages granted.
Jenny Challenor, mortgage strategist at Torquil Clark, the Wolverhampton-based firm of independent mortgage advisers, said: “Borrowers need to batten down the hatches now.
“This means that if your finances are stretched you need to face up to the facts today. If you don’t want to risk finding yourself backed financially into a corner, cut back on your spending, clear your debts and prioritise your mortgage repayments.”
4 Comments
Me and my husband have nearly had our home repossessed 3 times. The first 2 times, we managed to pay back the arrears along side the current monthly mortgage with great difficulty. The third time, we were only saved by a family member loaning us the £3000 we were in arrears with.
I know how difficult it can be. We did not do anything wrong and contrary to what people might think, we were not living the high life, my husband lost his jobe and then we put on short time and we did not have the income coming in, to pay all the bills.
There should be more help for people in our position. You are made to feel like a criminal when you go to court and this is wrong.
I don’t know whether we will be in the same position in the future but itis always at the back of your mind.
all true:))
I guess the government is making it far too difficult for the honest working folk to survive.
Working families can easily fall in to debt as they are often living on a knife edge. It is a tragedy when this happens to a family due to a change in cirumstances. Our society pressures people to buy their own home then pillories them when things go wrong. While I have little or no sympath for those that endlessly take out loans for lifestyle improvements I do have a measure of sympathy for those that are just honestly doing what is right by their families. I also think people need to think a lot more carefully before taking one of those debt consolidation loans. Many fall for the trap of clearing their cards etc. with the loan only to run them back to their limit again rather than destroy them. They are then burdened with a huge debt load which is at least partially now secured on their property. Why? A good example would be kids birthday parties. Used to be half a dozen mates, sarnies , cake and pop . Pass the parcel and musical chairs. Now it’s clowns , discos, banquets and hire a hall. Then it’s their second birthday. As it happens I’m Welsh so I’ve learnt that the Joneses are the same as the rest of us so we don’t need to keep up with them. (For the record I have a whole load of relatives called Jones). What we need and what we want are not always the same. Don’t be marketed in to thinking differently.