Repossessions 'set to rise as mortgages become unaffordable'

Posted: 22 Jan 2010 09:43:07 GMT

Repossession figures are set to rise as mortgages become increasingly unaffordable, one housing expert has stated.

Timothy Lambert, head of consulting at Ducalian, puts this down to the fact that interest rates have to rise at some stage, which will make home loans less affordable for some families who have suffered the effects of the economic slowdown.

He adds that while house prices have grown consistently in the UK since the 1950s, property values will not make a full recovery to their pre-recession levels until 2014.

Mr Lambert's comments come in response to recent research from Halifax, which revealed that the average British house price has risen in value by 273 per cent since 1959.

The market saw the biggest increase in the noughties, with property values rising by 62 per cent.

Mr Lambert goes on to add that while homes are still unaffordable for many people, the economy will eventually recover.

But he acknowledges that banks need to be more responsible with their lending criteria, stating: "Lenders need to start increasing levels of debt to equity but we can't return to the madness of the 110 per cent mortgage from a few years ago."

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