Repossessions Set To Rise In 2015
Will more homes be repossessed in 2015?
Figures released today by the Council of Mortgage Lenders show that the number of homes repossessed by the banks is likely to increase in 2015. The latest report comes as the property market appears to be slowing and takes into account the likelihood of interest rate rises next year. There is some disagreement amongst economists over when interest rates may rise with many experts opting for rates to increase towards the end of 2015. The number of homes that were repossessed in 2014 was just over 2014. The figure is likely to increase to 22,000 in 2015. There is some good news in that the number of homeowners that fall into arrears with their payments is set to fall next year.The number of households in arrears will be just under 22,000.
There is some concern amongst borrowers that they will strugle when mortgage rates go up as they will do at some time in the not too distant future. Many homeowners have never had an increase in their mortgage payments because they have bought their homes within the last 5 years whilst rates have been at record lows. These are the very borrowers that the Bank of England is concerned about and the reason why they have made it harder for new borrowers to get a loan. New borrowers will need a higher deposit and are also being looked at much more carefully by banks and building societies before a loan is issued. It is almost as though the banks are stress testing the borrowers.
When all of this is said and done there is not much that can be one if the mortgage rates go up and you lose your job. Borrowers simply have to make ends meet and hope to get back to work as soon as possible. We are in a low interest rate environment and therefore repossessions will be lower than nornmal. As soon as mortgage rate start to go up the number of repossessions will also increase.