A law firm has warned that the increase in unsecured personal borrowing could result in a repossessions surge this year.
Bank of England figures show that unsecured personal borrowing rose to £2.4bn in February from £900m in January – the biggest increase for more than five years.
Repossession litigation specialist Moore Blatch says these figures highlight the increasing pressure home owners will be under because of mort- gage and personal loan repayments.
Paul Walshe, head of lender services at Moore Blatch, says: “In the past, home owners have raised funds by withdrawing equity from their properties but they are now being forced to take out personal loans or increase their overdraft facilities, which means they are subject to higher interest rates.
“As a result, monthly outgoings are increasing, putting the pressure on meeting mortgage repayments.”