Rising unemployment could trigger repossessions

Wed, 21 Dec 2011

A rise in unemployment in 2012 could trigger a marked increase in home repossessions across the UK, it has been suggested.

Mark Blackwell, managing director of online property data network xit2, said: "The protracted crisis in the Eurozone and fiscal tightening domestically mean these latest figures are probably only the beginning of an upward trend in repossessions."

The industry figure explained the coming 12 months are likely to see lenders move their focus away from assisting borrowers who may be experiencing difficulties with their arrears, the Financial Times Adviser reports.

Instead, providers are likely to try and place greater emphasis and protection regarding their own mortgage books.

Mr Blackwell warned danger cases "rest on a precipice" and claimed they could fall over the edge owing to a small economic downturn or the slightest of rises in interest rates .

He explained the time when the base rate increases will mark the onset of long-term arrears turning into repossession cases.

His comments come after editor at What Mortgage Ben Wilkie recently suggested current low income rates have played a vital role in keeping repossession rates down.  

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