The turbulent state of the UK’s economy is continuing to put financial pressure on homeowners, with the number of repossessions set to increase over the next 12 months.
According to the Council of Mortgage Lenders (CML), the number of home repossessions is set to rise to 45,000 this year, up from 37,000 last year.
The first three months of 2012 saw 9,600 repossessions, up by 10% from the last quarter of 2011. Repossessions made up 0.16% of all properties under mortgage in the first half of 2012.
Although the CML says that the figures are stable compared to those from a year ago, it argues that they have been exacerbated by the rise in the cost of living, squeezed incomes and ‘economic and employment uncertainty’.
“That repossessions are likely to rise for the year as a whole is depressingly predictable. Although interest rates are expected to remain at 0.5% for the foreseeable future, a growing number of borrowers are still struggling,” said Mark Harris, chief executive of mortgage broker SPF Private Clients.
“Mortgage rates continue to rise, despite the non-movement of base rate, with more than a million home owners seeing an increase in mortgage rates in May, for example. Those with little or no equity in their homes don’t have the luxury of being able to remortgage onto a cheaper deal.”
May saw mortgage rates rise for more than a million homeowners after a series of increases from lenders. This rise is said to have been attributed to soaring lending costs and the faltering economy.
The CML has urged the government to support those consumers that are struggling by extending some temporary benefit arrangements for at least another year.