July 21, 2010
UK repossession rates could hit 1750,000 a year if the economy does not fully recover, according to an unseen report commissioned by the last government.
Over recent months, the housing market has undergone a mini recovery, with house prices slowly ebbing upwards and demand for properties returning to pre-recession levels. But a report commissioned by the National Housing and Planning Advice Unit for the Labour government, forecast that 1750,000 home could be repossessed if the “worst” should happen by 2012.
According to Housing Minister Grant Shapps, the report is being prepared for a public unveiling later this month in the “interests of transparency” and predicts how mortgage arrears and possessions would be impacted by different economic scenarios.
Council of Mortgage Lenders (CML) figures show there were 47,700 repossessions last year, with 53,000 predicted over the next 12 months, and experts believe further cases will largely depend on escalating interest rates.
“One of the most important things to protect against repossessions is keeping interest rates low,” said a CML spokesman and the government has urged to follow its suggestion.
"This will be achieved by tackling the £155 billion deficit which will help enable homeowners to stay in their own homes and avoid repossession through ongoing lower interest rates,” Mr Shapps added.
"The Government believes this measure will prevent repossessions better than any other individual scheme.”
With repossessions still lingering, homeowners fearful that banks and lenders are circling the front door should speak with financial experts and property solicitors to see what escape routes are available.
