Is Mr Brown Wrong?
Yesterday, speaking to the BBC, Mr. Brown said the number of UK homes being repossessed was a "fraction of what happened in the early '90s, but is he right to say this?
(PRWEB) April 11, 2008 -- Recently mortgage lenders have been reducing the amount of products available, and tightening their lending criteria. This is mainly down to the lack of liquidity within the industry. If the money isn't available the bank has to be very careful who they do lend to. This coupled with the interest rate rises and the lowering of house prices has seen a lack of options for many borrowers, especially in the sub-prime market (usually people with poor credit).
What does this mean for those in this category? John Porter, from Debt Counsellors www.debtcounsellors.co.uk said yesterday, "We are seeing many people who are struggling to pay their debts. As there is a lack of mortgage options, borrowers just don't have the options which they had a year ago. If they are moving from a fixed rate for instance, their option now are much more expensive, or they just can't move to another lender because of the withdrawing of products and the tightening of criteria. This means they are struggling to gain a completive and an affordable mortgage, which can make things for already struggling borrowers almost impossible. This could lead to many more over the next few years looking at losing their homes."
Many people who need specialist lending, such as sub-prime, are already being repossessed. The figures may not be as drastic as the 90's as for many lucky borrowers in the prime market who have enjoyed huge rises in their properties over the last 10 years, an so have security and equity, which is more attractive to lenders. But for many others the noose is tightening.
The Council for Mortgage Lender (CML) recently reported that there were fewer than 1 in 400 mortgages led to repossession in 2007. This was less than half the rate experienced throughout the first half of the 1990s. But figure from a recent report from Repossession Stoppers, show that in 2003 they were around 8,000 repossession, and in 2007 there where around 27,000. If this trend continues and with the credit crunch now starting to bite, the future looks bleak for many. Mr Brown saying that repossession are at a fractions of what they were in the 90's maybe technically correct at the moment, but when things really start to bite over the next year, then will this statement still stand true?
To find out more about how The Debt Counsellors can help reduce your debt burden and how to become debt free in 36-60 months, please call: 0800 018 6018 or visit www.debtcounsellors.co.uk.
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