Repossessions increase by 15 percent

It has been reported recently that repossession numbers have increased by 15 percent in the UK, with the first quarter of this year reflecting the first quarterly increase since the third quarter of 2009. According to officials repossession figures have been in decline for the past five quarters. However, a range of factors has now seen this figure increase with many officials stating that it is likely to continue increase over the course of this year.

The Council of Mortgage Lenders released these figures, and it is officials from the CML that believe the number of repossessions will continue to soar over the coming year. In the three months to the end of March 9,100 property were taken back by lenders and it is predicted by the CML that this could rise to as many as 40,000 or more over the course of this year. Some people are coping at present simply because of the base interest rate being at its rock bottom low of just 0.5 percent. However, if this increases over the next few months, as many believe it will, more and more people could find their homes being repossessed.

Officials have highlighted a number of factors which are thought to be partly responsible for the increase in repossession numbers. There are concerns that more and more people are struggling with their finances and finding it difficult to meet mortgage repayments because of factors such as frozen wages, increased taxes, government cutbacks, and rocketing living costs.

The Council of Mortgage Lenders stated: ‘Looking ahead, the financial position of many households is likely to be stretched for some while, and some will inevitably find themselves in difficulty. Lenders have a range of options to nurse borrowers through temporary problems, but will clearly need to be mindful of the regulator’s concern that too much forbearance may be as bad as too little.’

Tags: rate, concern, officials, repossessions, while, regulator, March

More people rush to fix their mortgages

It has been announced that a rising number of homeowners are rushing to fix their mortgage rates amidst fears that the base interest rate could shoot up over the course of this year. With inflation having rocketed to nearly double the target set by the government there are concerns that the base rate will have to be increased in order to bring inflation down to a more acceptable level.

With the speculation and rumours over when the base rate will increase many homeowners with variable rate mortgages are now getting concerned, and are flocking to try and get their mortgage rates fixed. As a result of this surge in demand many lenders have been pulling their cheapest deals and replacing them with more expensive ones.

There are concerns that inflation is set to soar even higher, and the shocking increase in the cost of living has sparked panic amongst homeowners who are now worried that interest rate increases are set to send repayments rocketing. Some economists expect inflation to rise to a staggering 5 percent within a matter of months, which would force the Bank of England and the Monetary Policy Committee to start increased interest rates. This would then impact on repayments on mortgages, and could tip many homeowners over the financial edge.

One mortgage broker said: ‘People will rush to fix because they’ve probably been worrying about interest rates for a while. It is inevitable that more people will fix because rates are expected to start rising.’

Around two thirds of homeowners currently have variable rate mortgages. However, a fixed rate mortgage offers the security of static repayments for the period of the fixed term, which will remain the same even if interest rates increase.

Tags: rate increases, rate, while, economists, base interest rate, term, interest rate, bank of england

Will you get through the recession?

With the recession underway in the UK many people are worried with regards to whether they will stay afloat financially. With living costs having rocketed over the past year, and the effects of the global credit crunch still affecting households, many people have been unable to put aside money in savings to try and get them through these difficult times, which is a fact that has caused grave concern amongst many. However, there are some tips and hints that could help you to get through this period. Read more

Tags: action, staffing, tide, best account, recession, cheaper provider, while, price

Buy-to-let buyers not causing price rises

A leading property expert says the popular belief that buy-to-let investors are pricing first-time buyers out of the housing market is unfounded.

Michael Ball, professor of urban and property economics at the University of Reading Business School, said investors are not to blame.

He was speaking at the annual conference of the Association of Residential Letting Agents (Arla) and said that there is only one way in which to bring house prices down to a more attainable level.

“It is to build more houses that people actually want to live in and in places where they want to live,” he told the conference.

Mr Ball was keen to emphasise that he feels those considering getting a buy-to-let mortgage are benefiting the market, and society as a whole, and should be encouraged to go through with their plans.

“Without buy-to-let, the private rented sector would probably be much smaller. The quitters would have exceeded new entrants,” he said.

“It enables households to build up their own equity and, although tenants do not share in capital gains directly, they do so through lower rents and lower risk.

“They can do this while living in good standard accommodation, as competition in the rental market is now greater,” added the professor.

Buy-to-let properties account for between five and six per cent of housing in the UK and is a bigger industry than all of the country’s pubs, hotels and restaurants combined.

Tags: buy-to-let, risk, house, housing, Letting agent, lower rents