Those faced with repossession are most likely to have taken out their loan in the previous four years, the research from the Chartered Institute of Housing shows.
It also found that established homeowners who have re-mortgaged in the last five years are more likely to face repossession that first time buyers and that most people who get into financial difficulty have borrowed right up to their limit.
The research, undertaken by the CIH’s consultancy arm ConsultCIH, examined hundreds of repossession orders to look for patterns that would provide valuable information for lenders in terms of identifying those at most risk of repossession.
It also found that almost all households facing repossession pay higher than average or unusually high rates of interest and that repossession orders are dominated by banks that have received government assistance, specialist and non-prime lenders.
‘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,’ said Richard Medley, Director of ConsultCIH.
‘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,’ he added.
Meanwhile the latest figures from the British Bankers’ Association show that the level of mortgage lending in the UK is continuing to edge upwards.
The number of approved mortgages increased by 4% in October compared with September.
Experts say it is not a sign that the property market is recovering.
‘With unemployment high and still rising, earnings growth low and still falling and house price/earnings ratios currently moving back up, we suspect the upward trend in housing market activity is losing steam,’ said Howard Archer, chief UK and European economist for IHS Global Insight.
