Repossessions soar

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by Kay Murchie

Research from the Royal Institution of Chartered Surveyors (RICS) shows that the number of residential properties going under the hammer, after being repossessed, increased 36% in the second quarter of 2007.

This is a 22% increase on the first quarter of 2007 and a 36% increase on the same period in 2006. Rising interest rates are responsible as homeowners struggle to meet mortgage repayments each month. RICS is concerned that the trend is set to continue, anticipating around 48,000 repossessions in 2008 - 124 a day.

A spokesperson for RICS said the extent of interest rate rises in 2007 is yet to filter through into higher mortgage costs and an increase in the number of homes being offered at auction in 2008 is expected. RICS added that auction houses will continue to be a quick process to foreclose mortgages where properties have been repossessed.

However, the spokesperson concluded that the annual growth rate in repossession orders has lessened in 2007 having risen considerably during the end of 2006. RICS anticipate that repossessions will continue to rise in 2008 and could exceed 45,000 – double the amount from current annualised rates.