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Home repossession to increase along with house prices

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Although the rate of home repossession has been steadily declining throughout the last five years, it is predicted they will soon begin to soar.

The previous five years has been referred to as a ‘benign period’ in home repossessions, and occurred because of rock-bottom interest rates that aided people to be able to remain in their homes and the patience of banks. However, according to the Council of Mortgage Lenders (CML), this is all about to change after the Bank of England raises their base rate of 0.5, which it has remained at since March 2009.

Rises will be hard to cope with

Chief economist at the CML, Bob Pannell, has stated: ‘The benign period of falling arrears and possessions may be coming to an end.’ It is predicted that 30,000 families will lose their home this year. Pannell added that although the vast majority of families will manage the soar without any major impact, many will find it hard to cope with.

This news has broken alongside the predictions that house prices will rise by 44% over the next seven years. This means that by 2020, the average cost of a home in England will have risen by £85,500. In London, home prices could rise by as much as £200,000. Only the North West and North East will see average prices below £200,000 by 2020. Renting is also set to take a hit, rising by 40% from an average £8,691 a year to over £12,000.

Renting for life

The National Housing Federation has stated that the housing market in England is ‘dysfunctional’ and ‘broken’. The federations chief executive, David Orr, has said: ‘With house prices set to rocket by 2020, an entire generation will be locked out of home ownership forever and be forced to rent for life.’home repossession ton increase along with house prices

The Royal Institution of Chartered Surveyors have added that the country’s housing crisis will continue to worsen unless new homes are built. Their chief economist Simon Rubinsohn has stated ‘If there is not a meaningful rise in new homes, the likelihood is that prices, and for that matter rents, will continue to push upwards. It will make the cost of shelter ever more affordable.’

Not enough new homes

Currently, the number of new homes being built is far below what we need as a country with only 106,500 being in built last year when really we need at least 240,000 according the National Housing Federation.

If we do not take action and fix England’s housing market, the RCIS has predicted that we could see ‘another housing bubble, reckless bank lending and a dangerous build up in household debt’ that could cripple Britain.

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About Siobhan Harmer

About Siobhan Harmer

Siobhan Harmer is an English Freelance writer who drinks far too much coffee!!

Website: Siobhan Harmer

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