24 October 2005
Debts incurred by personal loans could be a reason for the worrying rise in the number of home repossessions reported in the second quarter of this year, with the picture likely to look worse when the next set of results is announced this week.
Figures showed a 61 per cent year-on-year rise in repossession actions from mortgage lenders in the second quarter, with personal bankruptcies having risen by an analogous 27.5 per cent.
Wednesday's third quarter results are likely to tie in with the unabating levels of personal debt besetting the nation aside from mortgages, although the catastrophic figures of the early 1990s are unlikely to be repeated.
In July Ed Stansfield, property economist at Capital Economics, told thisismoney.co.uk: "For a small but growing minority of borrowers levels of debt have become a problem, despite historically low interest rates."
The forthcoming results follow news that the housing market itself remains in a precarious state, with prices having fallen again over the past month.
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