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House Repossessions Soar 40% In First Quarter

News that the number of homes being repossessed has risen from 6,471 in the first quarter of last year to 9,152 in the first quarter of 2008 has spooked many in the market and is likely to have an impact for some time to come. Experts forecast that the figure will rise even further over the next 12 months with the full extent of credit crisis yet to hit home. So what impact will this have upon the market?

The impact on the housing market will be two fold :-

Depressed Prices

As more and more repossessed homes are put up for sale this will drag house prices down as people scramble to attract the few buyers out there. The lower prices go the more desperate people will become with more and more moving into negative equity and the obvious financial affects this will have.

Finance Restrictions

As the mortgage companies check their books for customers who may be at risk of default or dropping into the area of negative equity, they are sure to shore up their rules and regulations. This could well see mortgage finance restrictions put in place until the situation bottoms out.

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