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Repossessions on the rise 'due to cost of mortgages'
12 May 2008
More houses are being repossessed because homeowners cannot afford their mortgage payments, claims a finance company.
A decline in the mortgage market due to the credit crunch has seen an increase in the cost of mortgage payments and the withdrawal of many mortgage deals.
Many first-time buyers who had been tempted by deals with generous introductory interest rates can no longer afford payments since the credit crunch hit the mortgage market, according to Firstrung.
"Now people are coming off those teaser rates they are finding that their payments are ballooning by up to 25 to 35 per cent in some instances," said Paul Holmes, operation director of Firstrung.
Homeowners who are moving up the property ladder are also finding it hard to cope with payments.
Mr Homes said: "Those with 150,000 plus mortgages are finding that they are struggling and they are struggling quite a lot."
According to statistics from the Ministry of Justice, the number of mortgage possession claims, rose 16 per cent in the first quarter of 2008.
