Borrowers facing "tough" 2008
The coming 12 months will be difficult for borrowers and could cause many to fall into debt, it has been claimed.As the impact of the global credit crunch begins to take hold in the UK, the Repossessions Advice Centre has warned that 2008 will be "extremely tough" for borrowers.Director Paul Fletcher said: "I think it's going to be an extremely tough year, and I certainly think we'll see quite a large increase in repossessions over that period of time. And it is the clients who are with the subprime lenders who are going to be suffering."He admitted that borrowers would be likely to benefit from the recent reduction in interest rates by the Bank of England and a further decrease in the new year would also be welcomed.However, he added that this might not be enough to help out many borrowers, explaining: "Even if interest rates come down by a percentage point, [borrowers are] still going to be paying 7.5 per cent rates."According to the Council of Mortgage Lenders, in the first half of 2007 0.16 per cent of mortgage loans were over ten per cent in arrears.
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