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FTBs will be 'least affected' by repossessions rise
14 May 2008 10:30
Increases in repossessions will vary between different types of homeowners, one mortgage broker has claimed, with first-time buyers (FTBs) the 'least affected' of all.
Latest Department of Justice figures indicate that repossession claims were up by 16 per cent year-on-year in the first quarter of 2008 at 38,688, while the number of repossession orders issued climbed by 17 per cent from the same period in 2007 to 27,530.
Yet Firstrung's operations director Paul Holmes has suggested that FTBs are relatively unlikely to lose their homes as this group have bought conservatively over the past two years, with an average mortgage of £115,000, typically between a two-party couple.
However, he warned that families would not get off so lightly, explaining that it is borrowers with mortgages worth over £250,000 who have got 'the real problems', such as those who have moved up the property ladder and doubled the amount that they owe.
Mr Holmes also predicted a rash of repossessions in the buy-to-let market, arguing that many investors who entered the sector in the past four years did so without considering if their rents would cover their mortgage, even if their repayments increased markedly.
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