The Council of Mortgage Lenders (CML) has reported 9,100 repossessions in the first quarter of 2011, a rise of 15 per cent from the fourth quarter of 2010.
Responding to the figures released yesterday (12 May 2011), the housing and homelessness charity Shelter said homeowners are suffering from the combined pressures of high living costs, frozen wages and VAT rises,
Campbell Robb, Shelter’s Chief Executive said: "These figures show that homeowners are really buckling under the combined pressures of high living costs, stagnant wages and VAT rises. This is only set to get worse as inflation continues to rise, increasing the pressure to raise interest rates soon.
"Our research shows the number of homeowners struggling to pay their mortgage each month has increased by more than 78 per cent in less than a year."
He added "Any rise in interest rates could be the trigger that finally pushes millions of homeowners into a spiral of debt, repossession and ultimately homelessness".
The CML is forecasting that 40,000 families will have their homes repossessed during 2011. Lenders warn that repossession figures could continue to rise, in part due to the Government’s austerity measures and cut programmes. During the recession, mortgage lenders were told to see repossession only as a last resort, but such lenience may not last as the cuts set in and interest rates rise.
The Council's Director General Michael Coogan said: “Looking ahead, many households are likely to find their budgets stretched for some time, and some will inevitably find themselves in difficulty.”