Home repossessions less likely in the North

Aug 31 2008 by Robert Weatherall, Sunday Sun

NORTH people are less likely to have their homes repossessed than almost anywhere else in the country, according to a financial expert.

The number of people in the UK having their houses seized by mortgage lenders has soared in the first six months of this year.

The continuing credit crunch combined with a rise in unemployment and a fall in property prices has led to nearly 19,000 properties being reclaimed during the first six months of this year . . . 48 per cent up on the same period last year.

But according to Newcastle- based independent financial adviser Alok Dhanda, the North is well-placed to survive the worst of the downturn.

While the South has seen a combination of a runaway housing market with over-inflated property prices and unrealistic borrowing, this region has remained more stable, Mr Dhanda said.

Among those worst affected are people who have mortgages with troubled bank Northern Rock. As part of the bank’s business plan to reduce the size of its loan book, it is fast-tracking repossessions.

It is estimated that Northern Rock — which saw 1400 employees leave the business last week — will make 7500 repossessions before Christmas. But only 16 per cent of Northern Rock’s mortgage business is in this area, compared with 48pc in the South. The rest is in Northern Ireland, Scotland and the Midlands.

Mr Dhanda said: “There was a lot of heavy borrowing in the South. Northern Rock was one of only a minority of banks which were offering mortgages of 125pc.

“Those people coming to the end of their initial fixed-rate term are finding the new Northern Rock monthly payment is beyond them . . . and other banks won’t offer them a mortgage of 100pc, let alone 125pc.

“Because of the more stable market in the North, homeowners here should be in a better position to weather the storm.”

A Northern Rock spokesman said repossession always remained a last resort but admitted it would be unavoidable for some customers.