Loan Repossessions Expected To Rise
Last year was particularly difficult for many borrowers in the UK, with high inflation and low wages growth or unemployment placing increasing pressure on household finances, often leading to arrears and defaults on a home owner loan or mortgage, personal loan or credit card debts.
The bad news is that financial experts and trade bodies are expecting the situation to become worse over the course of this year, with an anticipated increase in the number of homes being repossessed due to arrears and defaults on home owner loans and other secured loans on the property.
New figures, which have been jointly published by the Council of Mortgage Lenders (CML), the Financial Services Authority (FSA) and Home Loan Management Limited Business Intelligence (HML), have predicted that the number of loan repossessions will increase by around 7 per cent over the course of the next twelve months, before it falls again in 2013.
Figures from the CML showed that there were 27,500 homes which were repossessed towards the end of last year and the body has predicted a total number of 45,000 repossessions by the end of this year, due to the fact that there are already 27,300 home owner loans which currently have more than 10 per cent of the loan balance in arrears.
A number of experts are already saying that the UK economy has now returned to recession and this is only likely to place more pressure on employment prospects for many individuals who are already struggling with their loan repayments.
The only small conciliation for many borrowers is that the Bank of England are expected to keep the base rate of interest for loans at their currently low level for the foreseeable future, although even particularly cheap loan repayments may not be enough to save many borrowers from the inevitable.
