Agency warns of likely rise in house repossessions

Instances of house repossessions are likely to rise here as lenders increasingly look to solve the mortgage crisis, credit ratings agency Fitch has forecast.

However, the agency said it expects other tools — such as split-mortgages, trade-down products for borrowers in negative equity, and personal insolvency arrangements — to be used first, adding that the repossession or voluntary surrender of homes will be “a last resort”.

“Repossession will be the final resort. The number of borrowers in negative equity means that lenders may not want to repossess a distressed property and crystallise a larger loss,” Fitch said in a study on the Irish mortgage market.