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Over 2,500 families will face losing homes

More families will lose their homes in Northern Ireland than anywhere else in the UK this year, with a total of 2,540 houses expected to be repossessed.

According to a report by HML, a financial outsourcing company, repossessions will increase after the summer and will see 0.83% of mortgaged homes across the province affected.

In its regional repossession forecast, published yesterday, HML predicted 33,257 houses (0.3% of all mortgaged homes) will be repossessed in the UK during 2011.

Northern Ireland is expected to experience the highest rate of repossessions, with a significantly higher proportion of homes going into the possession of the mortgage lenders.

This reflects the 10.2% fall in house prices over the past year, combined with links to the troubled Republic of Ireland economy.

The report said UK repossessions look set to fall during the first half of the year (around 15,557 up to July 1), and rise during the second half of the year (17,700 after July 1). The forecast is based on an analysis of 320,000 live mortgage accounts.

Other regions hit hard will be Wales (with 0.37%), London (0.34%), the West Midlands (0.33%) and North East (0.33%).

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The South West of England will see the lowest proportion of repossessions (0.18%), said the report.

The upward trend was predicted to rise in 2012, with between 35,000 and 40,000 families |expected to lose their homes. Neil Warman, HML chief commercial and finance officer, said repossessions will rise “as a number of macroeconomic factors start to impact on homeowners and influence lender behaviour”.

He added: “Of particular concern will be the impact of rising inflation and interest rates on hard-pressed homeowners and the effect of continuing job losses.

“However, these are unlikely to feed through into repossessions during the early part of this year.

“Looking at 2012, we see increased affordability pressures for borrowers who are in work, together with the lagged effect of job losses in the public sector and benefit cuts. This will lead to a slight increase in repossessions, to between 35,000 and 40,000.”

The forecast said the prospect of rising interest rates in the |latter part of 2011 and 2012 “is of concern”, but said they would |display “a lagged effect”.

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