It has emerged this week that the rate of mortgage repossessions in the first quarter of 2011 has risen 15% from the last quarter of 2010.
The Council of Mortgage Lenders has revealed a sharp rise in repossessions, the first in more than two years. Meanwhile, millions of homeowners may soon face higher mortgage payments if, as expected, interest rates start to rise from the current historic low of 0.5 per cent.
Experts have warned that homeowners are ‘buckling under the pressure’ of tax rises, benefit cuts, record bills and pay freezes. If interest rates do increase suddenly again, the rate of repossessions could increase even higher. It is thought that around two-thirds of homeowners have a variable rate mortgage, which means repayments will rise when rates go up.
Between January and March this year, around 9,100 families lost the battle to keep their home. Nearly 250,000 homeowners have fallen behind with their mortgage, with some suffering arrears equal to more than 10 per cent of the value of their loan. This means on average, a homeowner with a mortgage of £150,000, could have arrears of at least £15,000.
The Council of Mortgage Lenders has predicted that the number of repossessions is set to rise even higher this year, anticipating around 40,000. The rise came before the full impact of the Government’s recent tax hikes and benefit cuts, which came into effect in April. Many household bills, including petrol, gas and electricity, are also at record highs, or set to rise soon.
As a solicitor specialising in challenging loans and mortgages, I too have seen an increased number of people facing repossession proceedings. If you are already struggling with your mortgage or secured loan repayments, now is the time to try and get on top of them, and reach an agreement with your lender. It would appear that financially, things are only going to get more difficult if interest rates rise.
If you are already facing repossession proceedings, and consider that your loan may have been mis-sold, or may be unenforceable, you should contact our specialist consumer litigation team on 01942 777777 as soon as possible. Legal Aid may be available to assist you with your legal costs, subject to eligibility.