Wed, 08 Feb 12
Britain is bracing itself for a sharp rise in home repossessions as the consumer squeeze forces thousands of struggling families to give up their dream of home ownership.
Low interest rates and lower-than-expected unemployment kept repossessions at relatively small numbers through the recession and they eased again as the country struggled into a tepid recovery. However, with incomes failing to rise to match inflation and unemployment set to increase sharply as government cutbacks bite and an embattled private sector fails to replaces jobs lost from the public sector, economists fear that will change.
The Council of Mortgage Lenders is forecasting a 22 per cent rise in repossession for 2012 to 45,000. But if the economy fails to meet up to expectations or if unemployment rises more sharply than expected those figures could easily be blown off course and look much worse at the end of the ear.
People dealing with those in financial difficulties also say that while mainstream lenders have made efforts to help manage the problem by exercising forbearance with borrowers in arrears and even restructuring loans, they have been frustrated that sub-prime lenders – which deal with less financially stable individuals – have been less willing to help.
See also: Home Asking Price Index
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