Home owners face repossession amid struggle to sell properties

Published 06th Jan 2011

Home owners are falling behind with their monthly mortgage payments at an alarming rate, charities warn, as estate agents reveal the struggle to sell properties.


Almost a million households are in arrears with their rent or mortgage, twice as many as a year ago, according to homeless charity Shelter.

Charities warned numbers would rise in the New Year and that those with children are most at risk of falling behind with their basic housing costs.

Campbell Robb, chief executive of Shelter, said: “Every two minutes someone faces the nightmare of losing their home and this research paint a disturbing picture of sharply rising numbers of people who face a daily struggle just to keep a roof over their head.

“We know from the cases we see every day that just one single thing, like a bout of illness, rent increase or drop in income, is all that’s needed to push people into spiral of debt and arrears that can lead to the loss of their home.

“With tough times ahead and homelessness already on the rise, we’re extremely concerned that this could be the beginning of a surge in the numbers of people losing their homes next year.”

Shelter’s survey of 2,000 Britons found 3 per cent of households admit to being in arrears with their rent or mortgage, the equivalent of 835,000 – up from 405,000 a year ago.

A third of these turn into repossession cases at court, according to Shelter. It equates to every two minutes someone facing the real threat of being evicted from their home.

Home owners are struggling to escape their misery by selling up as estate agents warn they are doing just one transaction a week amid a drop in demand from buyers who are unable to obtain affordable mortgages.

The average number of properties being sold per estate agency dropped from 15.2 to 14.8 in the three months to November, the lowest level since June 2009, according to the latest housing survey from the Royal Institution of Chartered Surveyors.

Andrew Grant, a RICS member from Worcester, said: “We are seeing surprisingly low transaction levels which seem to result from a combination of economic fear and harsh mortgage constraints. Prices are also under pressure and slipping back.”

Chris Armstrong, a RICS member based in Wales, said: “The cuts are starting to bite. I can see very dark months ahead and very little anybody can do about it.”

It comes amid historically low interest rates, which financial experts expect to rise next year amid rising inflation.

Melanie Benn, of mortgage brokers Private Finance, said: “Despite interest rates at record lows, a worrying number of homeowners are struggling to pay their mortgages.

“While normally these owners would sell up, with properties taking longer to shift as confidence falls in the housing market, this is not an option for many. When interest rates do start to rise, which many economists believe will happen in the second half of next year, this situation is only going to worsen and the number of repossessions could soar.”

Source: ' Telegraph '

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