Modern working practices make owners vulnerable

Repossessions Crisis Looms

It claimed mortgage lenders were not taking into account modern working practice, with more borrowers having flexible contracts and less secure terms of employment.

As a result, the Institute said, any downturn in the economy could lead to a corresponding rise in repossessions.

Although the housing market is buoyant, the number of repossessions is still high.

In 1980, just 0.06% of borrowers had their properties repossessed. This rose dramatically in 1991, peaking at 75,000, or just under 0.8%.

The most recent figures for 1996 showed that 42,500 properties were repossessed which represents 0.4%.

John Perry:

"Some mortgages are too easily arranged"

John Perry, policy director with the Chartered Institute of Housing, said mortgage lenders should do what they could to help vulnerable people already in the housing market. But he called for the banks and building societies to examine more closely the buyer's long term ability to pay. He criticised the companies which offered to "arrange a mortgages in ten minutes flat".

Mr Perry also urged buyers to take-out private insurance to protect their payments in case they lost their jobs.