45,000 repossessions predicted this year
Repossessions will more than double to 45,000 from 17,000 in 2006. More than 1 million people’s mortgages are at risk because they cannot afford to make repayments as the UK’s debt mountain increases.
According to the Financial Services Authority (FSA) people will struggle to meet their mortgage repayments but also other debts like credit cards and loans. The FSA predicts that 1.04 million mortgages which equates to a third of all mortgages approved between 2005 and 2007 are a ‘cause for concern’ because the people taking the mortgages had two out of three risk factors. These ‘risks’ are high LTV’s (loan to value), high loan to income ratios and people taking out their mortgage for more than 25 years.
The FSA has also warned that people face a £210 per month rise in their mortgage payments if coming out of a fixed rate period.
A report published last week by the Royal Institution of Chartered Surveyors revealed that there will be nearly 45,000 repossessions this year, an astonishing 123 people loosing their homes every day.
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