Lenders predict repossession rise

Homeowners are expected to struggle despite interest rate cuts

Four fifths of mortgage lenders believe that repossessions will rise this year, according to a survey.

Two fifths expect a rise of between 10 and 15% and 8% predict a rise of more than 15%, the repossession lawyers Moore Blatch found.

The lenders surveyed account for 40% of the UK mortgage market.

First-time buyers were identified as the group most at risk, followed by those with 100% mortgages and sub-prime mortgage customers.

Sub-prime mortgages are those offered to people with inferior credit records or unpredictable incomes.

"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," said Paul Walshe, head of lender services at Moore Blatch.

The firm said that couples splitting up, redundancy or business failure are the primary causes of 69% of repossessions.