'More Repossessions Could Hit The UK Within The Next Two Years', Warns Shelter

Shelter has warned the Government and mortgage lenders against complacency - and called on them to start preparing for a second wave of arrears and repossessions that could hit the UK within the next two years.

Shelter says the Government and lenders must start planning now as hundreds of thousands of homeowners face being repossessed or falling into arrears as the effects of rising unemployment hit home, interest rates begin to climb again and mortgage support schemes come to an end.

Despite the Council of Mortgage Lenders (CML) saying repossessions this year could be 10,000 lower than its original prediction of 75,000, new figures from the Financial Service Authority (FSA) show repossessions are up 62% in the last year, with a 33% rise in arrears.


Shelter Chief Executive Sam Younger said: "With arrears escalating at an alarming rate, unemployment at its worst for 12 years and interest rates very likely to rise next year, we believe a second, more devastating wave of repossessions could occur within the next two years.

"The Government and lenders are working hard to help homeowners who are struggling now. But they must not be complacent, and we fear they are not planning adequately for the future."

Shelter has seen a 250% increase in the number of calls to its free helpline regarding mortgage arrears over the last year, with an 85% increase in the number of calls on repossession problems. Many callers say they fear for their future and are worried they will no longer be able to keep a roof over their heads.

Shelter believes planning for the future and being prepared for a second repossessions wave is the only way we can avoid an overwhelming number of repossessions.

(CD/JM)