Tuesday, 28 June 2011
Warning of a wave of home repossessions
Richard Banks, the chief executive of UK Asset Resolution (UKAR) warns of wave of home repossessions when interest rates go up. At the moment repossessions are at 40,000 this year in 1991 they reached 75,500. He warns that customers who took on loans when house prices were at their peak will struggle when the Bank of England raise interest rates to curb inflation. Many mortgage holders are already more than six months behind with payments Richard Banks has said ‘‘you can see a tsunami….If you don't get into the hills you could get drowned by this’’ The Financial Policy Committee (FPC) inside the Bank of England says Lloyds Banking Group and Royal Bank of Scotland, have the largest exposure to customers whose mortgages are bigger than the value of their homes.