UK House Repossessions Set to Rise

By January 11, 2012House Repossession

rise in  UK repossessionsAs we reported on Monday, outside of London, the big players in the UK property market continue to depict a gloomy outlook for 2012 – an outlook that extends to house repossessions.

The Council of Mortgage Lenders (CML) believe that, with unemployment predicted to rise even further this year, more home owners will be compelled to ‘hand in their keys.’  Having said this, repossessions aren’t expected to reach the highs of 2009, although they will probably exceed the 37,000 of 2011.

The CML’s chief economist, Bob Pannel, said that falling incomes and rising unemployment are “likely to unwind some of the improvement in mortgage arrears we have seen over the past two years and lead to a somewhat higher level of possessions in 2012.”  There may be some relief to be gained by looking at the Council’s similar predictions for 2011, which proved to be unfounded.  However, they are convinced that this time the predictions are correct – they cite rising unemployment as the main cause.

Mr Pannel explained, “Over recent months, as fiscal cuts have begun to be felt, the UK has seen a sharp increase in headline unemployment figures, and the Office for Budget Responsibility envisages a higher level of joblessness persisting through next year and beyond, (and with) higher unemployment and a prospect of real incomes stabilising at best over the course of the year, we should expect to see increased signs of financial stress.”