Householders Feeling Effects of Higher Loan Rates

Fri, 02 Nov 2007

Householders are beginning to feel the effects of the credit crunch, according to banking group Abbey, though it could be far worse. Figures released by the bank show both the number of homeowners in arrears by three months or more and the number of repossessions increased in the third quarter, though in truth the figures could be worse.

The number of homeowners in arrears by three months or more was 7,365, just 42 more than the previous year, whilst the number of repossessions rose by 38 to 498. Both are historically low levels, though the bank warned that the number of homeowners in arrears is set to increase due to the higher rates .

The bank, which is owned by Spanish company Santander, assured customers that it is well placed to deal with the credit crunch, as less than 10% of its business relies on short term loans.

In terms of profits, it was a successful quarter for the banking group, as its share of the mortgage market rose from 7.9% in the second quarter to 10.9% in this last quarter. Meanwhile, profits were up 21% from the previous year to £207 million.
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