Banks see rise in voluntary repossessions (UK)

Banks are seeing an increase in the numbers of homeowners deciding voluntarily to hand back their properties because they cannot afford to keep up mortgage payments.

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Northern Rock, the nationalised bank, has seen a growing number of voluntary repossessions since the summer. The bank was one of the most aggressive mortgage lenders before it ran into difficulty last year and it is thought that a significant proportion of customers saying they can no longer afford their mortgages are those with Together products - where the customers took out an unsecured loan and a mortgage.

Another mainstream mortgage lender, which did not wish to be named, said it had seen cases of voluntary repossessions jump from 10 a month in January and February to 55 a month in September and October. Some of this increase relates to new build developments, particularly in industrial cities such as Liverpool and Manchester.