Increasing repossessions 'could mean more people rent'

News Category: Industry News

New figures suggest that more people in the UK could have to rent property in the future because they are having their own homes repossessed.

Data released by the Council of Mortgage Lenders (CML) shows that 14,000 homes were repossessed in the UK between January and June 2007 - 30 per cent more than in the same period the year before.

Factors like higher interest rates, more sub-prime lending and "increasingly active arrears management" by lenders were cited as reasons why repossessions had increased.

Michael Coogan, CML director general, added: "Interest rates are clearly higher than many were expecting, and are set to remain so.

"Overall, the vast majority of mortgage borrowers will continue to cope, even in a market where affordability is stretched. But anyone who thinks they may face difficulties should talk to their lender early to explore their options."

With many expecting interest rates to increase again before the end of the year,more and more people are likely to need to stay in private rented accommodation as they will be unable to afford to purchase their own home.

Indeed, a report from the Property Investor Show indicated that seven in ten landlords plan to expand their portfolio in the next year to accommodate increasing demand for rental properties.