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Repossessions set to escalate, warns Shelter

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by David Masters
Repossessions set to escalate, warns Shelter

A “devastating” second-wave of arrears and repossessions is set to hit the UK within the next two years, according to a leading housing charity.

Shelter has called on the government and mortgage lenders to prepare for hundreds of thousands of repossessions as rising unemployment takes its toll on homeowners.

Figures release this week by the Financial Services Authority (FSA) show that repossessions have increased 62% in the last year, whilst arrears have risen 33%.

Shelter, meanwhile, has seen a 250% increase in the number of queries on mortgage arrears to its free helpline in the past year, and an 85% rise in the number of calls on repossession.

Sam Younger, Shelter chief executive, said: “With arrears escalating at an alarming rate, unemployment at its worst for 12 years and interest rates very likely to rise next year, we believe a second, more devastating wave of repossessions could occur within the next two years.

“The Government and lenders are working hard to help homeowners who are struggling now.

“But they must not be complacent, and we fear they are not planning adequately for the future.”

He added that without government intervention, the UK could end up facing an even bigger housing issue.

“It is still a fact that every single day there are hundreds of hard working people losing their homes, and with thousands upon thousands drowning in arrears there is no question we are storing up huge problems for the future,” Younger said.

The warning comes just a day after the Council of Mortgage Lenders revised its forecast for the number of homes expected to be repossessed in 2009 from 75,000 to 65,000.

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News posted: June 23, 2009

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