Surveys conducted by independent bodies like the Council of Mortgage Lenders (CML) and Royal Institution of Chartered Surveyors (RICS) have revealed a steep rise in cases of house repossessions with more and more borrowers finding it difficult to make mortgage repayments.
As many as 14000 homes were repossessed in the first half of 2007 – this figure is almost 18% higher than the reported repossessions in the second half of 2006 and 30% higher than the property repossession figures of the first half of 2006. Speaking of the last six months of 2007, CML has indicated that with mortgage arrears building up, about 125100 homeowners were already neck-deep in trouble. According to the RICS prediction, the house repossessions’ trend is likely to gain momentum in 2008, with the projected number of repossessions being somewhere near 43000.
Considering the fact that there have been five interest-rate rises in the span of the last one-and-a-half year, these sudden rise in house repossessions was not unexpected. The lenient mortgage lending rules that permitted even people with troubled credit histories to borrow money have further contributed to the increase in the number of repossessions.
This, however, does not summarise the whole scenario and you may not ultimately end up losing your dear home. There are some rays of hope for you if you would like to evade repossession orders:
- The first thing you can and should do is talk to your lender. As soon as you are able to identify your problem (read it as financial crisis), inform your lender of your difficulty - this is perhaps the best way to find a solution to the problem. Remember that most of the lenders see property repossession as a last resort as court proceedings are situations everybody likes to avoid. They too look forward to early solutions to such situations rather than go for house repossessions.
- The next step for you will be to work out a budget, also drawing a payment plan (even if that is a minimum). You may opt for an interest-only mortgage (for the financial crisis period) or think of extending your mortgage payment; this way, you may successfully cut back on the monthly payments. Of course, you will have to remember one thing – jointly agree to a payment plan and stick to it to avoid house repossessions.
These are precisely the steps you can take when you fear losing the roof underneath which you seek shelter. If you want to prepare beforehand, just check out your lender’s repossession rules and procedures to avoid the nasty consequences of house repossessions.
Mark Brogan is Director of Sell Quick Ltd (http://www.sell-quick.co.uk), one of the UK’s largest and most established quick property-buying organisations, specialising in Sell and Rent Back, with a strong and deep-rooted commitment to delivering the highest quality services to its customers.
