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Over 50 Families A Day Lose Their Home In The UK

According to new data released by the Royal Institution of Chartered Surveyors, more than 50 families a day will lose their homes in the UK during 2007 because they can no longer maintain their debt repayments.

The Institution puts the problem down to record property prices in the UK causing families to take on record levels of debt that they simply cannot afford to maintain. In addition, many families are being advised to take on home loans which are unsuitable for their needs. With the Bank of England having raised base rate twice in the latter part of 2006, rising interest rates have also added to the problems of families trying to repay their debts. All of which has resulted in the practice of home repossessions once again becoming widespread among UK lenders looking to recoup some of their money.

Official figures also sound out that there is a growing tendency for UK lenders to repossess the homes of those unable to meet their debt repayment obligations. According to data released for the period from January to June 2006, approximately 8,140 families in the UK lost their homes due to repossessions by lenders. This figure is a massive 76% increase on the same period for 2005.

Commenting on the growing problem of UK homeowners taking on more home loan debt than they can afford to repay, David Stubbs, senior economist at the Institution, said: “With couples needing nearly 82% of joint take-home income to fund upfront buying costs of a typical home, the Government’s plans to create an inclusive society seems like a pipe dream. Unless the Government builds more affordable housing and raises the stamp duty threshold, many households will continue to struggle to access the housing market.”

By way of comparison, ten years ago home loan repayments accounted for approximately 13.5% of the take-home pay of a couple in the UK. Today this figure is estimated to be nearer to 23%. With income levels in the UK not having risen with the same level of cut-throat pace, the net result has meant that families in the UK simply do not have the same levels of readily available cash as before to pay their other living costs – living costs which have also seen dramatic increases over the same period of time.

As a result of its findings, the Institution is predicting that 2007 will see 19,000 families in the UK lose their homes to repossessions. If correct, this figure would mean that 52 families a day are now at real risk of losing their home.

Alisdair Milton
16th January 2007


More Information:

  • Repossession – How and Why
    Your home is the security the lending company holds in case you stop making repayments into your mortgage. The worst that can happen is, they will repossess you house. But why does this happen?
  • The Dangers of Negative Equity
    The great thing about buying a property is that it’s a guaranteed investment, prices just keep going up, right? Wrong. We look at what happens when the bubble bursts and prices drop.


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