Fears of Repossession Increase

Fri, 13 Aug 2010

Experts are warning that Tory tax increases and spending cuts risk triggering a surge in repossessions .

Many people were highly concerned that the recession could have started an epidemic of families having their homes repossessed .

However, very low interest rates as well as a higher than anticipated increase in unemployment have prevented such a crisis.

Pressure on mortgage lenders to assist homeowners with mortgage repayment problems has also helped.

The most recent repossession figures continue to fall from a peak in early 2009, down another 400 to 9,400 in the three months to June.

The Council of Mortgage Lenders has decreased its forecast for repossessions for 2010 from 53,000 to 39,000 as the number of homeowners in arrears with their mortgage payments also dropped.

However, campaigners are warning that this is the "calm before the storm" and raised concerns that the ConDem's severe Budget and a cuts toa public sector purge which is going to set off a new wave of job losses.

The situation could worsen should the Government scale back or get rid of mortgage rescue schemes launched by Labour.

The greatest danger would be if the Bank of England increases interest rates to keep a lid on inflation, anticipated to rise in 2010 after VAT sky rockets to 20%.

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