A rise in the number of homeowners falling into mortgage arrears is likely to create a peak in the number of properties being repossessed in the UK in 2011, says Standard & Poor (S&P).
The group found that 20 per cent of all problem mortgages are now deemed as being in severe difficulty, which is double the rate seen back in 2008.
"Record low interest rates have seen the 'cure rate' for UK non-conforming borrowers in milder arrears rise as they get their mortgage payments back on track," S&P said in its report into non-conforming residential mortgage-backed securities.
"However, there is a large core of borrowers who remain in severe arrears, despite lower scheduled payments."
But despite the economic worry for homeowners, the rise in repossessions could be a great time for buy to let landlords to take advantage and pick up a repossessed property bargain at property auctions.
Landlords: Find out how to purchase buy to let properties at a bargain price with Lawpack's expert guide How to Buy a Repossessed Property Bargain.
Published on: February 1, 2011