Repossessions up 71%

| October 28, 2008 | 0 Comments
Repossessions up 71%

The Financial Services Authority (FSA) has reported a sharp rise in the number of people losing their homes because they are unable to keep up their mortgage payments.

In the three months to the end of June, repossessions of residential properties rose 71% to 11,054.

The figure compares with 6,476 during the same three months of 2007.

According to the FSA, repossessions have been on the increase since September 2007, while the number of homeowners three months or more in arrears with mortgage repayments has also been rising for over a year.

Since the onset of the credit crisis last autumn, the cost of home loans has increased, putting pressure on household finances.

At the same time, house prices have fallen; surveys by Nationwide and Halifax indicate that the value of the average home is down over 12% on a year ago.

In addition, government figures published earlier this month show a 164,000 rise in unemployment during the three months to August, taking the number of people officially out of work to 1.79 million.

This week, the Bank of England has estimated that the number of homeowners in negative equity could rise from its current level of around 500,000, to 1.2 million, in the months ahead.

The prediction is made in the Bank’s Financial Stability Report and the analysis includes a further 15% decline in house prices before the market finally bottoms out.

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