More people face losing homes as job cuts and rate hikes take effect

Repossessions fell 24% in 2010, but experts have warned that 2011 could see an increase in repossessions as higher interest rates and job cuts kick in.

Figures from the Council of Mortgage Lenders last week showed there were 36,300 repossessions by first-charge mortgage lenders in 2010, 24% fewer than in 2009.

Repossessions for second-charge mortgages were also down 41% compared to 2009, with just 864 prop-erties being repossessed.

On the same day as the CML released its figures the Ministry of Justice revealed its repossession fig-ures. These detail how many len-ders made a claim to the court, not the number of actual repossessions.

Its figures show there were 19,329 mortgage possession claims issued in Q4 of 2010, 2% lower than in Q4 of 2009 but 1% higher than in Q3 of 2010.

The CML is predicting a slight increase in reposs-essions in 2011 and expects 40,000 by the end of the year.

Campbell Robb, chief executive of Shelter, says the charity received a rec-ord number of calls to its home owner helpline last month.

He says: “There are a number of big threats on the horizon – such as interest rate rises and possible in-creases in unemployment – which could result in thousands of people pushed over the edge into the spiral of debt, repossession and potential homelessness.”

He says with someone facing the prospect of losing their home every two minutes, the govern-ment needs to help more.

He adds: “Having made huge cuts to Support for Mortgage Interest – a vital housing safety net curr-ently helping thousands of people – the government has done nothing to take forward Lord Freud’s proposal to make lenders change their rates to help more people in need of this support.”

David Birne, insolvency partner at HW Fisher & Company, says: “At present, a lot of households are stretched but they are surviving.

“But when interest rates start to rise, many will rapidly succumb. Even a percentage point rise in Bank rate will send many people over the edge.”