Repossessions figures provide warning to first time buyers

03-Aug-2007

The Council of Mortgage Lenders has revealed that the number of repossessions rose by 30 per cent year-on-year in the first half of 2006, highlighting to first time buyers the potential pitfalls of taking on too large a mortgage.

The CML added that just one per cent of mortgages were in arrears, in line with long-term trends, and also noted that the number of possessions were still very low historically.

But with first time buyers taking on increasingly large mortgages, the Royal Institute of Chartered Surveyors has predicted that further trouble lies ahead.

"With the housing market slowing into 2008 and interest rates expected to hit six per cent, homeowners slipping behind with their repayments may be left stranded, unable to sell their way out of trouble," commented Rics senior economist David Stubbs.

The CML also added that it was refraining from any further predictions regarding repossessions until a clearer picture of the market was available.

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