33,000 homes set for repossession

More than 33,000 people are expected to have their homes repossessed in the coming year, it was predicted today.

A total of 33,257 properties, the equivalent of 0.3% of all homes with a mortgage, will be taken over by lenders during 2011, according to financial outsourcer HML.

The group, which analysed data on 320,000 mortgages, said repossessions were likely to fall in the first half of the year to 15,557, before rising to 17,700 during the second six months.

It added that the number of people who lost their homes looked set to continue rising in 2012, with between 35,000 and 40,000 properties likely to be repossessed that year.

The group's forecast for 2011 is considerably lower than the Council of Mortgage Lenders' prediction that 40,000 homes will be repossessed this year. It is also below the 36,300 people who lost their homes in 2010.

Neil Warman, chief commercial and finance officer of HML, said: "Despite the challenging economic environment, the downward trend in repossessions we saw last year is set to continue for the first half of this year.

"However repossessions will then begin to rise during the second half as a number of macroeconomic factors start to impact on homeowners and influence lender behaviour.

"Of particular concern this year will be the impact of rising inflation and interest rates on hard-pressed homeowners and the effect of continuing job losses. However, these are unlikely to feed through into increased repossessions during the early part of this year."

He added that increased affordability pressure on borrowers who were in work, combined with the lagged impact of job losses for public sector workers and benefit cuts were likely to lead to the continuing increase in repossessions in 2012.

Northern Ireland is expected to see the highest level of repossessions as a proportion of all mortgages at 2,540 or 0.83% of all loans.

The group said the higher level would reflect the fact that house prices have fallen by more than 10% in the region during the past year, as well as the area's links to the troubled economy in the Republic of Ireland.

Wales is also expected to have above average repossession rates at 1,1914 or 0.37% of all mortgages, followed by London at 4,159 or 0.34% and the West Midlands and North East both at 0.33%.

At the other end of the scale, the proportion of people losing their home is likely to be lowest in the South West at 1,829 or just 0.18% of mortgaged properties.