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UK home repossessions to hit 40,000

Wednesday, 19 January 2011 12:33 PM

The number of UK homeowners evicted from their properties is set to increase this year, as lenders lose patience with those struggling to keep on top of their mortgage payments.

According to the Council of Mortgage Lenders (CML), around 40,000 Brits will have their homes repossessed in 2011 – an increase of more than 11 per cent from last year's figure of 36,000.

In its latest market outlook, the group blamed rising unemployment and a growing number of property owners in mortgage arrears for the gloomy forecast.

The CML said: "Our prediction that mortgage arrears and possessions will tick up again in 2011 will ensure that there is ongoing scrutiny of market behaviour.

"In our view, payment problems will be driven by a combination of job losses, reduced government support for borrowers in difficulty and an end to the mortgage rescue options for some households with worsening mortgage arrears.

"There are limits to forbearance as well, and this will come to the fore over the next few years," the trade association explained.
Last week, some of Britain's leading economists suggested that the Bank of England could increase interest rates as early as June 2011, which could bring both good and bad news.

Ray Boulger, at independent mortgage advisor John Charcol, told the Daily Telegraph: "When the Bank does raise rates, you'd expect an immediate improvement in instant access savings accounts."

However, mortgage customers could see their monthly repayments rise significantly, further increasing the threat of eviction and repossession.
 

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