Towards the end of 2006, as home loans increased along with borrowing costs, homeowners were struggling and there was a marked increase in home repossession orders in the final three months of 2006.
The figures for home repossessions in England and Wales rose 22% on the year to 22,827 in the 3months Oct-Dec. The total number of repossessions in 2006 was 91,195, which is a rise of 28.7% from the year before.
As everyone expected, the Bank of England rate rises hot on the heels of each other is making it difficult for UK homeowners to keep up the loan repayments.
With increased house prices, people have stretched themselves even further just to get on the property ladder, often taking out enormous loans, which the lenders have been more than willing to offer them.
The last interest rate rise is believed to have taken borrowing costs to a 6 year high of 5.25%, and with the common belief that another rise is quite likely, it is no wonder that figures show the number of British people falling into bad debt shot up 44% on the year to 27,828 in the final 3 months of 2006.
The Department for Constitutional Affairs declared that almost half of the fourth quarter’s possession orders were suspended, offering the homeowner a lifeline to catch up with mortgage arrears and does not definitely mean the home will be repossessed.
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