Properties up for Sale for Non-Repayment of Mortgages

Owners are being pushed to sell their homes because they are not being able to make mortgage repayments. On an average more than 5000 properties are up for sale because of financial difficulties faced by the owners. Repossessions have increased by almost 70 per cent in 2008 in comparison to last year and according to the Council of Mortgage Lenders’ repossessions have increased to 45,000 in December from 18,900 in June. According to a survey by National Association of Estate Agents (NAEA), as many as 20 per cent of sellers had difficulty in paying for their mortgages and such figures accounted for almost 50% of the properties being up for sale.

Out of the 27,000 properties which were up for sale last week, almost 5000 were “forced” sales because of the owners’ inability to of mortgage repayments. Individuals with little equity found themselves in a kind of a fix as they were ineligible for fresh deals and compelled to pay as per standard variable rates of their lenders. Unemployment is also a factor giving rise to this situation.

The owners who are facing the most difficulty in repaying loans are those on fixed and low rate mortgage loans who cannot cope with the increase in repayments. The average fixed rate in August 2006 was 5.18 per cent and a borrower who took loan on this rate would have to pay an addition of £147 a month for a loan of £ 150,000 with the standard variable rate increasing to 6.36 per cent. In spite of rate cuts by the Bank of England, mortgage drought continued. The number of people looking for houses has also fallen drastically to 196 from 211 per month per agent, according to NAEA.

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