Voluntary Repossession of Homes Increased

The low interest rates on home loans and beneficial government measures have helped the home owners to repay the loans timely. This has led to a reduction in the repossession of homes by the lenders in UK.Though it may seem that this is realistic, the figures released by the Council of Mortgage Lenders (CML) show that the voluntary repossession of homes without a court order has increased in the first quarter of this year.

The number of homes that were voluntarily handled back to the lenders reached almost 30% of the total homes where any agreement or repayment plan could not be maintained.

According to CML, many home owners who were not in a position to repay the loan either due to ill health or due to shortage of funds take this route to free the tension.

Lenders are more inclined to accept this because it can relieve them from lengthy court proceedings. Also an increase in the balance sheet from property sale increases their financial strength.

The public sector job cuts and sales tax increase in UK will make the people’s income at low level, causing repayment of home loans difficult for average home owners.

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