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Sub-prime sector sees 29% arrears

Sub-prime arrears in the UK rose to 28.6% in Q4 2008 from 25.1% in the previous quarter, a report from Standard & Poor’s reveals.

The report from S&P Ratings Services shows that arrears of more than 90 days stood at 12.5% com-pared with 10.3% in Q3. Repossession cases also rose, going from 2.8% to 3.5% in three months.

Kate Livesey, analyst at S&P Ratings Services, says: “Increases in delinquencies during 2008 were primarily driven by affordability issues coupled with the inability of borrowers to refinance.”

Richard Sexton, director of business development at e.surv, says: “Repossessions have yet to peak, although they are likely to do so in 2009. We’re still on the upward part of the curve.”

But he adds that lenders can be in negotiations for 14 months before applying for repossessions.

He says: “Lenders are not rushing to repossess. These figures are a reflection of the market.”

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