67% of lenders expect rise in repossessions

The latest annual Moore Blatch 2010 repossessions report, reveals that 67% of mortgage lenders and repossession experts are predicting an increase in the number of repossessions in 2010.

Moore Blatch found of the 67% of mortgage lenders predicting an increase in repossessions, 50% believe repossessions will rise by as much as 5% while 17% believe a rise of between 5-15% and a further 6% foresee a rise in repossessions of over 15%.

Some 28% of lenders thought there would be no change in repossessions in 2010, while 6% believe there will be a decrease.

The lenders cited excessive borrowing from other sources as the main cause of increasing repossessions, with redundancy the second contributor, marital/partner separation as the third biggest contributor and interest rate rises as the fourth biggest contributor.

Paul Walshe, head of lender services, Moore Blatch, says: “The Council of Mortgage Lenders revised, and subsequently lowered their 2009 predictions for repossessions from 75,000 down to 48,000.

“However, much of this fall was due to the implementation of a government initiative to provide consistency in lenders’ approach to repossessions; the Pre Action Protocol, as it is known. This created a bottleneck which will start to clear in 2010.

“Sadly, the underlying cause of repossession being excessive borrowing, is still causing people to default on their mortgages.

“This is one of the reasons why we believe that all providers of finance, whether, mortgages, credit cards, car loan or any other source, should have to take into account total borrowing before offering any money, as it is often secondary borrowing that tips people over the edge, and into losing their home.”