The Council for Mortgage Lenders has predicted that the number of mortgage borrowers falling into serious arrears of three months or more will exceed 500,000 by the end of the year. This is a substantial increase on the arrears level at the end of last year of about 200,000.
CML expects repossessions to jump from 45,000 last year to 75,000 this year. Some commentators believe the figure will rise much higher, as more homeowners choose to walk away from their debts.
But with the housing market still moving slowly, banks and building societies are likely to have a long wait to recover any value from repossessed homes if they try to sell properties via estate agents. Instead, they are putting more homes onto the markets via property auctions.
Those attending auctions hope to buy homes cheaply. Property auctions offer a more efficient way of quickly disposing of a property and determining current market value. Whichever interpretation is made, it looks as if property auctions are set to be even more popular in 2010.
Andrew Smith of Primelocation.com says that in recent months the property website has experienced a sustained increase in visitors looking for property for sale at auction. "We have never before seen so much interest in property auctions," says Andrew. "It looks like 2010 will be the year of the property auction. And it is easy to see why. Buyers with cash can get a bargain and a quick purchase. Sellers can get their hands on money much quicker. It's a win, win situation.
"This is a trend that has become well-established in the UK. Our prediction is that property auctions will also become much more firmly established in international markets this year."
