Business | Property
Repossessions could rise sharply in UK
The number of mortgaged properties that will be repossessed in 2008 is set to rise to 33,400 - up more than 23 per cent on last year and a heady 300 per cent increase on 2004.
- Reuters
- Published: 00:30 May 2, 2008
London: Property repossessions are expected to jump almost a quarter this year, as the fall-out from the credit crunch takes hold, a leading economic consultancy said.
The number of mortgaged properties that will be repossessed in 2008 is set to rise to 33,400 - up more than 23 per cent on last year and a heady 300 per cent increase on 2004.
The prediction, from the Centre for Economics and Business Research (CEBR), comes as borrowers increasingly feel the pinch from higher mortgage costs and a tightening of lending criteria.
At the same time, Britons have record personal unsecured debts and the cost of living is rising, stoked by soaring fuel and food prices.
CEBR said that until the problems in wholesale money markets are rectified, mortgage finance will be severely constrained and, even where available, rates offered to consumers will fail to reflect recent cuts in the base rate.
The Bank of England has cut the cost of borrowing three times since December last year, taking the official rate of interest to 5 per cent from 5.75.
However, some lenders are failing to pass on cuts to consumers as they vie to shore up their financial position and improve margins.
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