Repossession rates set for sharp rise

The rate of repossessions around the UK is set to see a sharp rise over the course of this year, recent research has suggested.

A study carried out by the Centre for Economics and Business Research (Cebr), the number of repossessions in 2008 is likely to be 23 per cent greater than was the case over the course of last year.

Cebr is convinced that more than 33,000 homes will be reclaimed this year, which would represent an increase of some 300 per cent from the figure for 2004.

Serious debt management problems are squeezing the finances of millions of homeowners and in this environment many will simply not be able to cope with the strain.

“When affordability becomes a problem the inevitable result is a rise in the number of repossessions,” said Nur Ata, a senior economist at Cebr.

In response to recent efforts by the Treasury to ease the housing market crisis, David Kuo from Fool.co.uk warned borrowers to remain vigilant against lenders offering uncompetitive mortgage deals.