Repossessions 'set to rise in 2008'

More than 80 per cent of mortgage lenders believe that home repossession will rise this year, according to a new survey from law firm Moore Blatch.

Surveying firms accountable for over 40 per cent of the UK mortgage market, the repossession specialist found that most fear first-time buyers and buy-to-let investors will struggle to meet higher costs in 2008, against a backdrop of economic downturn.

Four in ten (40 per cent) lenders expected repossession levels to rise by 10-15 per cent this year, although a further eight per cent believed they would increase by more than 15 per cent.

Paul Walshe, head of lender services at the firm, said: "We have seen a significant increase in repossessions over the year, and with house prices falling, the vast majority of lenders expect this to continue over the foreseeable future.

He went on to explain that the survey revealed the industry-wide opinion that the Financial Services Authority should increase regulation, particularly in the buy-to-let market, to avoid further problems.

Mortgage lenders identified first-time buyers, sub-prime borrowers, those with 100 per cent mortgages or self-certification mortgages, and buy-to-let investors as the most at-risk groups.

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