Repossessions can be predicted from early stage

The research identified some clear financial similarities and patterns of household behaviour, which are particularly valuable to identify those at risk of repossession. These include:

* Most borrowers are faced with repossession within four years of taking the mortgage out;

* Established homeowners who have re-mortgaged to access equity in the past five years – as opposed to first time buyers – are more likely to face re-possession;

* Almost all households facing repossession pay higher than average or unusually high rates of interest;

* Evidence suggests that most people getting into financial difficulty have borrowed right up to their limit;

* Households generally stop paying their mortgage altogether, rather than reducing or deferring payments;

* Repossession orders are dominated by banks that have received government assistance, specialist and non-prime lenders;

* The interest rates on loans subject to repossession have generally increased between start of arrears and court hearings; and

* Arrears of five months or more are likely to make it difficult to avoid repossession.

Richard Medley, Director of ConsultCIH, said: "Our research suggests that it is now possible to predict when and where future rises in the number of home owner repossessions are most likely to occur.

"Whilst it is not possible to get much advance warning of a rise in repossessions – often between just four and eight months – organisations and agencies will now be in a much stronger position to take preventative action and target those households who fit the profile of those most at risk."

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