Terraced houses ‘most likely for repossession’

Data has revealed that terraced properties are the most likely types of houses to be repossessed.

According to HML's regional forecast, these dwellings will account for 40 per cent of all those reclaimed by lenders this year.

The company stated nearly a quarter (24 per cent) of repossessed houses will be apartments or flats, 21 per cent will be semi-detached properties and 15 per cent will be detached homes.

There will be around 33,260 repossessions in 2011, with this figure climbing to 40,000 next year, according to chief commercial and finance officer at HML Neil Waterman.

He stated that most terraced houses and flats belong to first-time buyers, who may have encountered difficulties such as negative equity since the recession, which has wiped as much as 20 per cent from the value of some UK properties.

Mr Waterman recognised that wage freezes, job security, rising living costs and government cuts have weighed heavily on most householders' finances.

"These factors are starting to impact on homeowners, as there has been a moderate increase in the number of borrowers whose arrears represent more than 10 per cent of the value of their mortgage," he remarked, adding: "This is likely to feed through into higher repossessions next year."

And senior technical manager at John Charcol Ray Boulger claimed the number of repossessions will rise if interest rates increase too quickly.

He noted that such action from the Bank of England could see hard-up householders facing large increases in the cost of their mortgages that they cannot afford to pay down.

By Joe White