A peak of 13,200 properties were repossessed in England and Wales at the height of the financial crisis in the three months to March 2009, with 48,900 properties taken to court in total that year.
House prices fell for the fourth consecutive month in December last year to £281,272, according to Halifax, and are down more than 4% from their peak in August.
The OBR estimates that prices will fall by 9% between the fourth quarter of 2022 and the end of 2024, due to significantly higher mortgage rates and the economic slowdown.
They plunged more than 20% during the financial crisis.
Mr Rathi previously warned that young borrowers under the age of 30 were “particularly at risk” of defaulting. Those first-time buyers had “quite often stretched out to buy property,” he said, adding, “They may have gotten a 2% or 2.5% fixed rate mortgage. When it expires, they can consider a significantly higher rate. of 5pc or more. »
The FCA has also warned that borrowers who have used the Purchase Assistance Scheme, which allowed first-time buyers to secure a property with just a 5pc deposit, could be at greater risk of default as they also start paying interest on the interest-free component. of their purchase, in addition to being forced to pay thousands of pounds more each year when they change their offer. “It’s a part of the market that we will have to watch very closely. »
The Resolution Foundation think tank has warned that a fall in house prices will leave nearly 140,000 young people living in property worth less than their mortgage.
An estimated 1.4million homeowners will need to remortgage this year, according to the Office for National Statistics.
telegraph Uk
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