Alarming rise of 54% in home repossessions

Posted under General by Michael

The rise in home repossessions is alarming as revealed in the data by the Council of Mortgage Lenders (CML). A large number of homeowners in the UK are losing their property.

Repossessions in the year 2008 rose by 54% to 40,000, making it a 12-year high, although this figure was less than forecasted by the CML.

Rise in number of homeowners in arrears was also highly alarming. It surged by 70% as recession started taking hold of economy and unemployment continued rising.

The CML’s forecast for 2009 indicates that repossessions would total around 75,000, despite lenders making serious efforts to resort to repossessions only as a last resort.

CML’s director general, Michael Coogan informs that increasing number of borrowers were either surrendering their keys or abandoning properties. He is urging struggling borrowers to approach their lenders and discuss other solutions to avoid losing property.

Coogan argues that borrowers are still responsible for debt even if they abandon property; it is therefore in borrowers’ own interest to work through their problems.

Government has introduced several initiatives which could help homeowners in avoiding repossessions.

Government revealed details of Homeowners Support Scheme on 23 February. Housing Minister, Margaret Beckett announced that Government was doing everything possible to ensure that repossession was used only as a last resort.

Under provisions of another scheme borrowers would be allowed to defer repayments up to 2 years if their incomes fall sharply.
The Royal Institution of Chartered Surveyors believes that Government’s measures appear to be creating a positive impact.

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