More home repossessions expected after Q2 rise

Mon, 01 Aug 2011

More home repossessions are expected after a rise in the second quarter of the year, it has been reported.

In June, the Council of Mortgage Lenders (CML) revised its housing market forecasts and predicted that the number of repossessed properties in the UK will rise to 40,000 by the end of the year.

According to MortgageStrategy.co.uk, this would be a hike of 4,000 on last year's figures and could increase to as many as 45,000 next year.

The website noted that first-time buyers are predominantly at risk of falling into arrears with their mortgage repayments and are thus more likely to have their homes repossessed .

Its own forecasts are markedly more optimistic, with an estimated 33,258 repossessions predicted to occur during 2011 and 35,000 to 40,000 in 2012.

With the general expectation now being that interest rates will not rise until next year, a spike in repossessions could be some time away.

MortgageStrategy.co.uk added that a recent fall in the number of unemployed workers, more prudence on the part of lenders and fewer first-time buyers are also key factors in its lower predicted rate of repossessions.

Meanwhile, the CML recently criticised the Scottish government for not stepping in to stop rules being changed that force lenders to wait two months before pursuing repossession action.

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