Interest Rate Rise Could Affect Repossessions

A possible rise in interest rates could affect the number of property repossessions occurring in the UK, according to one analyst says Zoopla.

Ray Boulger, senior technical manager at John Charcol, said it is clear that the rate of repossessions occurring in the UK is dependent on changes to the interest rate, with the Bank of England effectively holding the cards.

A sharp rise would be likely to significantly increase the number of repossessions occurring in the country, he added. With financial household already too tough to be carried on and rising inflation rates has already dropped the peoples lifestyle far below than that of being acceptable. Even with low mortgage deposits, that over all price of house seems to be larger than it should be owing to the rising interest rates.

The expert's comment follow the publication of a report by Shelter revealing the areas in England which have the highest proportion of homeowners at serious risk of repossession.

Corby in the east Midlands was in first place, followed by Barking and Dagenham and Newham in London and Knowsley in the north-west.

Mr. Boulger commented: "The longer the timeframe before bank rates start to go up, the less quickly I think we will see repossessions go up because clearly one thing that would tend to push repossessions up is if interest rates go up too quickly."

He added that he does not believe a slight increase in repossessions would be "particularly surprising" but the link to interest rates would certainly be evident if it did.

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