Foreclosures are at an all time high as more fixed rate mortgages convert over to adjustable rates. It is expected that around 3 million homes in the UK could be at risk for foreclosure this year as this happens. For those seeking a refinance to a new fixed rate mortgage, the options have been very limited. This has meant that homeowners have little choice but to default after their fixed rate mortgage becomes too expensive to afford.Howard Archer, the chief UK economist at Global Insight, a financial analysis provider, said: “The situation seems set to deteriorate significantly further.”The financial pressure on many home owners is increasing, and it seems certain that repossessions will trend up appreciably over the coming months, particularly if the economy suffers an extended marked slowdown and unemployment starts rising, which seems likely.”David Stubbs, the senior economist at the Royal Institution of Chartered Surveyors, said: “The repossession numbers emphasise the difficulties that some home owners are having in meeting their mortgage payments. This difficulty may be exacerbated over coming quarters if people who want to remortgage find it hard to secure an affordable rate on their new deal.”
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