This year, the number of homes repossessed throughout the spring fell, according to figures by the Council of Mortgage Lenders (CML), but there are fears this will rise again in the face of rising interest rates.
5,400 homes were repossessed in the second quarter of the year, a drop of a thousand on the three months prior. It is also a drop of over two thousand on the same time period the previous year.
However, the looming threat of interest rate rises will only be manageable, says the CML, if it rises in small, gradual steps.
“Rates will rise at some stage, of course, and borrowers should be planning for that now. We welcome the message from the Bank of England that, when it raises rates, it plans to do so in a series of ‘baby steps’, matched to a careful assessment of the ability of households to deal with higher borrowing costs,” the BBC reported the director general of CML, Paul Smee, saying.
Mark Carney, the governor of the Bank of England promised in his quarterly inflation forecast that any rise in interest rates would be gradual.
However, although repossessions have reduced in number, it is reported that more and more renting tenants are being evicted, with an increased number of cases of the first stage of tenant eviction, a landlord possession claim, since 2010.
With interests rates set to rise in the first quarter of next year, repossessions could rise again as people fail to keep up with mortgage payments. “Any borrower anticipating payment problems should talk to their lender as soon as possible,” added Mr. Smee.
