The Council of Mortgage Lenders has released figures that show the number of repossessions in 2006 has increased to 17,000 and they say that this is likely to continue to rise. Although this figure was lower than the organisation had originally predicted at 18,000, they have adjusted their figures for 2007 to be 19,000 and 20,000 for 2008.
The arrears picture at the moment is very cloudy as previous rate increases have worked through and so levels have fallen, but then interest rates are on the increase again and people could get a shock if their fixed or discounted rates expire.
Our view
We think that the number of repossessions will increase and see excessive borrowing from other sources such as credit cards and car loans as one of the main factors.