Lenders quicker to repossess

12 2008
More and more homeowners face repossession because lenders are moving more quickly when borrowers default.

That is according to Capital Economics, which said that lenders are beginning to start proceedings on those who default on payments more quickly than in the past.

It is bad news for mortgage borrowers and suggests that many people are better off renting rather than buying.

"I remember in the early 1990s there really wasn't any such a thing as a sub-prime mortgage market in the UK, and we're seeing a much sharper pick-up in possessions from a comparatively low level of mortgage arrears this time around," Ed Stansfield from Capital Economics told the BBC.

"I think it's indicative of lenders taking earlier action to deal with defaulting borrowers.

"It's people who have taken advantage of self-certification or sub-prime mortgages who are struggling most heavily at the moment, and that's I think where repossessions have been concentrated," he continued.

Recent figures from the Ministry of Justice showed a marked rise in repossession orders in the first quarter of 2008.ADNFCR-1219-ID-18589902-ADNFCR

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