Repossession ‘to be avoided in most cases’

The number of repossessions in the UK is not set to rise significantly, an expert has argued.

Editor at What Mortgage magazine Ben Wilkie said that despite the recent economic problems, repossessions have been relatively low.

He added: "Lenders, generally speaking, are very good at helping people who get into financial difficulties. There are always going to be some people who get repossessed, but the vast majority of people who find themselves in trouble will find a way of keeping their home."

Mr Wilkie reasoned that the number of repossessions will only rise significantly if the base rate does, since at present the low cost of borrowing means it is much easier for people to be able to meet their repayments.

And in the current economic circumstances, he added, there appears to be little likelihood of the Bank of England choosing to do such a thing anytime soon.

Should the UK slip back into recession the number of people out of work may rise significantly, which could leave many homeowners struggling to make ends meet and pay off various kinds of debt, not just their mortgages.

However, this could help keep interest rates lower for longer.

Mr Wilkie's comments follow the publication today (December 13th) of a survey by housing charity Shelter indicating one in every 111 households is at risk of repossession.

It said the most imperilled households are those in London, followed by people living in Manchester, Slough and Peterborough.

The report also noted that while urban dwellers are most at risk, some rural boroughs such as West Lancashire and Bedford are also areas with many vulnerable people.

Posted by Paul Thacker