Repossessions and Arrears to Rise
The number of people who lose their homes because they can no longer pay the mortgage is expected to rise by 67% by the end of next year.
The Council of Mortgage Lenders (CML) said today that repossessions will rise from 45,000 this year to 75,000 by the end of 2009.
It also said the number of homeowners falling more than three months behind with their mortgage repayments will more than double to 500,000 households.
A sizeable share of these reposessions will be properties owned by landlords, which could leave thousands of tenants in danger of losing their homes.
According to a separate report today from price comparison website uSwitch.com, two million people are already considering taking a mortgage payment holiday.
Mortgage lenders often allow borrowers to take a break from repayments for two months a year or more, with the outstanding debt being paid back over the remaining term of the mortgage.
But while a break from repayments will ease homeowner's pain in the short term, it could lead to problems remortgaging later.
Last month, Halifax stopped offering payment holidays to borrowers who have been made redundant, while Nationwide is considering a new rule that will only allow homeowners with at least 25% equity in their property to take a payment holiday.
The CML also said the number of mortgages taken out in November was less than half the number taken out in the same month last year, with total mortgage advances of just £14.6bn, the lowest level since February 2002.
The figure was 22% lower than October and 51% below the same month last year.
www.guardian.co.uk
(Thursday, December 18, 2008)