Repossessions ‘set to increase’

The number of repossessions in the UK will rise this year, an expert has predicted.

Communications manager at the Council of Mortgage Len…

The number of repossessions in the UK will rise this year, an expert has predicted.

Communications manager at the Council of Mortgage Lenders (CML) Bernard Clarke said: "We have forecast that possessions are likely to increase this year.

"Many people expect the economy to be difficult again this year and we may see a rise in unemployment with continuing pressure on household finances, which may put more people into arrears."

He also suggested the number of people behind with their mortgage payments will jump by 2.5 per cent to reach 180,000 homes this year, compared with 166,000 in 2011.

However, Mr Clarke said that the likely rise should be seen in the "context" of a comparison with the early 1990s, when the number of repossessions was twice as many as the number the CML expects to see this year.

Those who are facing the possible threat of repossession may find an individual voluntary arrangement (IVA) can help.

An IVA can lead to interest on debts of £15,000 or more being frozen, with monthly payments reduced. This depends on at least three quarters of creditors agreeing to the deal, but if this is accepted it can help to prevent a home being lost.

The number of people struggling to balance mortgage payments with other bills is rising, according to housing charity Shelter.

Its research has found one in five people have reduced their spending on essentials like domestic energy and food in order to keep up payments, a 60 per cent increase since 2008.

By Joe White
 

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