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Unemployment increase and rise in repossessions

by Matthew Harris

After a steady downturn in the number of repossessions recorded across the UK, the Financial Services Authority has reported that the number of homes lost in this way is up for the first time in over a year.

According to official figures the number of homes being repossessed climbed by 17% in the first quarter of 2011. This is the first increase since late 2009 since when, a fall was recorded in every quarter up until now, when statistics show that the number of repossessions rose to 9,613 in the period accounted for. This still represents a fall from mid 2009, when the figures peaked at around 13,000.

The FSA confirmed: “An increase was also seen in the first quarters of 2008 and 2009.”

Meanwhile, the stock of unsold, repossessed homes has also risen for the first time in two years with the figure standing at 16,025.

Meanwhile, housing charity Shelter has produced its own set of statistics that indicate where the repossessions occur and, perhaps not surprisingly, the figures confirm a clear link between seized homes and unemployment.

Britain’s repossession ‘blackspot’ has been identified as Corby, where ‘at risk’ homeowners represent 7.56 in every thousand households – a figure that compares with the lowest ratio of 0.83 in West Dorset.

While the FSA showed repossessions to be rising, unemployment was on the increase too. Chief executive of Shelter Campbell Robb had this to say on the subject,

“This research paints a frightening picture of repossession hotspots across the country where homeowners are on the brink of losing the roof over their head.

“We know only too well that the combined pressures of high inflation, increased living costs and stagnant wages are really taking a toll on people. All it takes is one thing like job loss to tip people over the edge and into the spiral of debt, repossession and ultimately homelessness.”

Meanwhile, the FSA figures for the next quarter will highlight whether the rise is just an anomaly or whether the spectre of housing repossessions is truly on the increase once again.

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