The number of mortgage arrears and home repossessions have reached an 8 year high according to the council of mortgage lenders (CML). Lenders repossessed 14,000 homes in just 6 months showing an increase of 30% on the year before. People with bad credit mortgages (sub-prime mortgages) and bad credit loans have been hit the hardest according to Michael Coogan of CML who said “The greater risks inherent in sub-prime lending are resulting in significantly higher levels of repossession in that part of the market compared to mainstream experience.”
All this comes at a time when the Bank of England plans to increase the base rate again very shortly which can only add to the mayhem. Howard Archer, of Global Insight, said “Clearly, the higher that interest rates rise, the greater the danger that a growing number of people will be pushed over the edge and there is a clear need for many households to improve their personal balance sheets.”
