Loans and overdrafts cause repossessions

Monday, October 24, 2005

Debt such as personal loans, credit cards and overdrafts may be contributing to the rising amount of UK homes being repossessed.

The Mail on Sunday reports that there was a jump of over 60 per cent on repossession activity by mortgage lenders in the second quarter of 2005 compared with the same period of the previous year.

However, this has not been attributed solely to the cost of the mortgage that the occupiers owe money on.

Mounting debts such as personal loans, credit cards and overdrafts may be a larger problem for the nation's borrowers, as more and more find themselves unable to repay their mortgage lender.

Figures also show that the number of personal bankruptcies has increased over the same period by over a quarter, with a 27.5% rise.

These latest figures would seem to add weight to the voices calling for a cut in interest rates in September, as the last climb in bankruptcy numbers was attributed to higher interest rates.

Whilst that is not a suggested cause in this instance, consumers would surely welcome any relief at a time where debt is obviously troublesome.