Repossessions up by 71%

The Financial Services Authority (FSA) has just announced that number of property repossessions has risen sharply. The number in the second quarter of the year was 11,054, up 71% compared with the previous year.

The FSA also said that the number of borrowers struggling with home loan arrears had risen. Homeowners are urged to contact their lender as soon as they find themselves in difficulty with repayments. The Council of Mortgage Lenders has estimated that 45,000 homes will be repossessed in the UK in 2008, a rise of 27,100 over last year’s figure.

Negative equity

The Bank of England has reported that UK house prices are showing a sharper decline than properties in the US. The Bank has estimated that 500,000 homeowners in the UK are in negative equity as a result of a 13% fall in UK property prices since their peak in October last year. It predicted that this number will increase to 1.2 million - 1 in 9 UK homeowners - if house prices decline by another 15% over the coming months.