Following on from research which revealed that 16 per cent of repossession cases were the result of 'borrowing from other sources,' Moore Blatch believes a growing number of properties will be seized in the next few months as a direct result of unsecured personal loan.
Indeed the latest statistics revealed unsecured borrowing had grown by £2.4 billion in February, the biggest rise for more than 5 years.
“Unsecured borrowing has been given a boost by lenders reducing the availability of mortgage equity," explained Paul Walshe, head of lender services at Moore Blatch.
"In the past, many people in financial difficulty may have raised finance by withdrawing equity from their property, and are now being forced into taking out personal loans or increasing their overdraft facilities, subjecting themselves to high interest rates.
"As a result, their monthly outgoings are increasing substantially, meaning they can no longer afford their mortgage repayments.”
In response, the vast majority of lenders believe that all borrowing should carry a mandatory risk warning. A number have also called for the Financial Services Authority (FSA) to produce a set of guidelines governing 'acceptable borrowing'.
