Repossessions Set To Rise Again According To New Figures
25 September 2009
The current economic downturn is continuing to have a negative impact on arrears and house repossessions according to recent figures from the Council of Mortgage Lenders (CML). The continued high level of repossessions affects not only the purchase market but also the rental market and Accord Lets, specialists in property to rent in Birmingham , explain what impact the recession continues to have.
CML figures show that there were 11,400 cases of possession (equivalent to one mortgage in 1,000) in the second quarter of 2009, up 14% on the same period in 2008. The total number of possessions in the first half of 2009 stands at 24,100, compared with the CML forecast for the whole year of 65,000. While the economy remains weak and with unemployment still growing the CML expect arrears and possessions to rise in the second half of the year.
Mr Mimmack, from the firm who offer not just Birmingham apartments to let but property to rent in Leamington and Warwick property to let , said, “Repossessions figures are continuing to rise and so more and more families have to move out of their homes as lenders take legal action to repossess the properties. Clearly, these families will be looking for somewhere to live and with them unlikely to secure another mortgage they will need to find good quality rental accommodation to move into. With arrears also rising more people are looking to sell their homes to free themselves from their mortgage burden and move back into rental accommodation also. This should continue to drive rental demand.”
According to the CML figures, around 1,400 buy-to-let mortgaged properties were taken into possession (0.12% of all buy-to-let mortgages) in the second quarter of 2009 and this was unchanged from the first quarter.
New initiatives from the government coupled with lenders extensive use of ‘receivers’ mean that fewer ‘buy to let’ properties are being repossessed and so tenants in properties with landlords struggling to meet their repayments are afforded some protection.
Mr Mimmack from Accord, the letting agents in Birmingham city centre, added, “Existing tenants are not generally suffering as badly as homeowners as landlords are not seeing properties being repossessed in anywhere near the same numbers. The CML expect the outlook to remain challenging for the rest of 2009 and 2010 and so as more and more homeowners struggle with arrears and repossession the demand for rental property is likely to remain buoyant.”
For more information please visit the Accord Lets website at www.accordproperty.co.uk