UK Government Policy Likely To Increase Bank Repossessions House for Rent Real Estate Today

UK Government Policy Likely To Increase Bank Repossessions

January 18th, 2012 | by Savannah Fuhrman |

Over the last three months we have heard nothing but bad news concerning the UK recession and with the conservative/lib dem governments economic blinkers firmly in position, its anticipated that there will be a much higher rate of bank repossessions in the future as we nose-dive into an almost certain double dip recession. Todays reports testify to their utter failure on economic policy. Mervyn King, governor of the Bank of England is reported as saying that, One has to go back to the 1920s to find a time when real wages fell over a period of six years. Wages are stuck in a rut (that’s if you have a job) and the cost of living is rising sharply, which means that in real terms our income is decreasing.

The harsh austerity measures put into motion by the coalition government are displaying precisely what the labour government warned against and tried to avert. Ed Balls, Labours Shadow Chancellor, was recently quoted as saying, The government inherited an economy that was strengthening, with growth of 1.1% in the second quarter, thanks to decisions we took to support jobs and get the economy moving. It also meant last years deficit came in £20bn lower than previously forecast.

Now we are seeing the first signs of what the Conservative-led governments decisions are having on the economy. The fact is cuts which go too far and too fast will damage our economy. And shrinking growth and rising unemployment is not only bad news for families, but will actually make it more difficult to get the deficit down. It is not too late George Osborne and the Treasury must urgently rethink their reckless plan to cut the deficit.

Evidence for this stance comes from reports over the last month from the UK Statistics Office which shows a 0.5% increase in inflation and a 0.5 % contraction in GDP. Couple these figures with the increase in VAT, job losses in the public and private sectors and an almost certain interest rate hike in the coming months and the consequence will be more mortgage holders finding it impossible to manage mortgage repayments.

Without doubt, the most destructive result of the governments recent actions will be an increase in the number of house repossessions. While some sectors such as industry are showing a little growth, many, including construction, are contracting, and as we move into the first financial quarter in April and the results of public sector job losses begin to be felt, there is little to stave off the impending repossession crisis.

Results from research released last month by Shelter, a UK homelessness organisation, offered some very grim news. One question in their research asked people how often they had used their credit card for their mortgage payments over the last year and the astonishing figure was over 2,000,000 times. This can only mean more bank repossessions in the coming year.

Low interest rates over the last few years have undoubtedly contributed to keeping bank repossessions comparatively low for a country in recession, but as interest rates are almost guaranteed to rise in order to combat rising inflation and more workers find themselves out of a job, the number of house repossessions can only intensify.

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