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Repossessions Levels 'Increasing'

Sep 5, 2007
An increasing number of homes are being repossessed, according to new figures.

In a study released by the Royal Institution of Chartered Surveyors (Rics), the proportion of residential properties offered at auction was shown to have risen by 32 per cent over the second quarter of this year. With this rise being driven by growing levels of property repossessions, the financial services firm suggested evermore Britons could find themselves in arrears as their affordability conditions have "deteriorated". This deepening in difficulties was attributed as consumers struggle more to meet the cost of mortgages, utility bills and personal loans following recent base rate increases by the Bank of England's monetary policy committee (MPC).

Between April and June, some 5,120 residential homes were sold at auction - the highest level recorded for more than two years and up by 22 per cent from the previous three-month period. As the effects of five interest rate rises by the MPC are revealed to have increased the amount of repossessed properties showing up in auction lots, a rising number of homes are predicted to go under the hammer. Meanwhile, the financial services provider suggested that the number of repossessions could be set to go beyond the 45,000 barrier next year - a rate of 124 per day.

Commenting on the study, Rics economist Oliver Gilmartin said: "With the full impact of interest rate rises in 2007 yet to filter through into higher mortgage costs we continue to expect a rise in the number of homes going under the hammer into 2008. The auction house will continue to be a quick means to foreclose mortgages where properties have been repossessed".

"Encouragingly, the annual growth rate in repossession orders has eased back in 2007 having risen quite sharply during the back end of 2006. However, Rics estimate that repossessions will continue to climb higher into 2008 and could exceed 45,000, a rise of 50 per cent from current annualised rates."

Overall, the highest concentration of auctioning was shown to have taken place in the north-west of England where some 826 homes were sold via such a method during the three-month period. In addition, the region witnessed the largest rise of repossession orders across Britain during the quarter, as it was also home to the most repossession orders to be filed outside the capital in the six months leading up to April. Rics also revealed that repossession orders in Merseyside had been subject to a "particularly acute rise in growth" during the last three months of 2006, with this up by 60 per cent from the same period in 2005.

However, those who are currently struggling to meet the cost of various living expenses and cannot access traditional forms of borrowing may be looking to take out a bad credit personal loan as a way of helping to manage their spending and get back on their financial feet. Earlier this year, James Jones, consumer affairs manager for Experian, claimed that consumers considering such a loan should get a copy of their financial history beforehand as it may help determine the rate of interest which is set by providers.
About the Author
Steve Smith writes for 1 Stop Finance Shop, a one stop, Personal Loans Shop, with information on bad credit loans and debt consolidation loans available on site.
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