RSS FeedsThe number of repossessions on the increase as a result of secondary loans
09/05/2008
Homeowners who took out secondary loans are adding to the increasing number of repossessions in the United Kingdom according to the housing charity Shelter.
Many UK homeowners took out additional loans on their properties when the housing market was booming taking advantage of the situation. Many homeowners had built up considerable equity on their properties so taking out a secondary loan was a popular way to raise that extra cash for home improvements, etc. Many homeowners even used the money to pay off certain debts likes loans and credit cards as the interest rates on mortgages were more affordable than on personal loans and credit cards.
The charity Shelter is predicting that the number of repossessions in the UK will increase to something like 53,000 in 2008 which is somewhat more than what the industry estimates. This figure is approaching the record levels of the number of repossessions back in 1993 when numbers reached a massive 59,000.
At least 20% of the current repossessions involve homeowners who took out secondary loans according to Shelter.
The charity also stressed that the continuous decline in house prices will result in an increasing number of homeowners going into negative equity, which is not a great position to be in for those who want to sell.