Repossessions and debt problems could be around for many years to come, as more homeowners struggle to come to terms with their mounting debts and rising unemployment, according to a new report.

Home repossessions and debt problems will be around for years

A study by the Council of Mortgage Lenders (CML), expects that repossessions will rise to around 53,000 in 2010 – up 15 per cent from 46,000 in 2009. They also predict that people will struggle to keep on top of their debt management, and will have repayment difficulties for long after the recession, as their figures anticipate borrowers with arrears rising to 205,000 from 188,000.

The CML said: “The pattern of the early 1990s — in which the annual number of possessions exceeded 40,000 for seven consecutive years — suggests that we should expect only a slow recovery from the peak of mortgage payment problems in this cycle.”

2009 repossession forecasts from the CML were revised down, after it became clear that low interest rates, increased patience from lenders and government assistance meant that fewer households were struggling with their mortgage repayments.

Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, said: “The latest figures from the Bank of England show the cost of mortgage finance to be easing. This … should help to continue to push prices higher for at least the next few months.”

Ivan Cooper, Chairman at debt advice specialists Chiltern, said: “The last ten yeasr have seen cheap credit and many people developing outstanding debts alongside their mortgages.

“Unfortunately for many people, trying to service their home loans, credit card debts and other borrowings has become increasingly difficult as living costs have increased, the economy has turned and credit isn’t as cheap or freely available.

“To try and avoid repossession and possible bankruptcy, it’s always recommended seeking impartial debt help from a reputable provider – such as Hamilton Locke, The Debt People or Chiltern.”

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