Slow down in rise in personal insolvencies
The rise in personal insolvencies in England and Wales has taken a dip in the second quarter of this year.
The last couple of years has seen double digit growth in personal insolvencies, but the second quarter of this year has seen a sharp reduction in growth. In the three months to the end of June personal insolvencies fell by 8.1% to just under 27,000, which was a steep fall compared to the record highs in the previous couple of quarters.
This is despite the rise in living costs and the series of five interest rate rises over the past year. Company liquidations also feel over the year to just over 3000, which equated to around a 4.2% fall. Although personal insolvencies are down, the number of individuals and households that are experiencing difficulties with repayments as a result of the interest rate rises has risen, and it is thought that many could face repossession as a result of being unable to keep up with repayments.
Recent reports have already highlighted the sharp increase in repossession levels in the first half of this year.
An official from the Council of Mortgage Lenders stated: "The sharp rise in repossessions in the first half of this year has been driven by a combination of factors, but the absolute number of repossessions is still low by historical standards. Interest rates are clearly higher than many were expecting, and are set to remain so. And the greater risks inherent in subprime lending are resulting in significantly higher levels of repossession in that part of the market compared to mainstream experience."
18th August 2007
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