Repossessions expected to double
Wednesday, April 9th, 2008The number of families losing their homes due to repossession is set to soar from 30,000 last year to around 60,000. It will mean that the number of house repossessions will double, prompting the worst property crisis in over ten years according to mortgage lenders.
The Council of Mortgage Lenders had said that it expects repossession figures to hit at least 45,000 in 2008, but analysis by the Liberal Democrats reckons that the figure will be more like 60,000. The Lib Dems studied homes which were spending 75% of their disposable income on home loan repayments and say that there were twice as many homes on the list than last year.
The CML now believes that the property market is on the verge of the most serous crisis since Labour came to power a decade ago. The warning was sounded on the same day that the Bank of England published figures showing that the housing market was going into rapid decline.
Borrowers have been hit by a double whammy in the past 12 months and this has left many people in serious financial difficulty. On the one hand five Bank of England interest rate rises in the past year sent mortgage repayments cost soaring by as much as £200 a month extra. Subsequent rate drops have not eased the burden. On top of this the global credit crunch means that many borrowers can no longer get access to additional credit since banks are now tightening up on their lending criteria and finding it hard to borrow the money themselves in order to lend it on.
In the mean time, cost of living has risen sharply, with increases in food prices and fuel costs, but little increase in wages. Consumers burdened with personal loans and credit cards, taken out in healthier financial times are now finding themselves squeezed hard.
