Banks should increase repossessions - Davy economist

The banks should increase the number of house repossessions as part of a get-tough approach to rising mortgage arrears.

That's according to a new report from Davy stockbrokers released today.

Davy's forecast that mortgage arrears for owner-occupiers could peak at 16 and a half per cent - with buy-to-let mortgages arrears running at more than twice that rate.

Chief Economist with Davy Research Conaill McCiollaith says if banks are to return to profit, they'll have to take stronger action.

"More repossessions, particularly for the buy to let sector, will have to rise from the current exceptionally low levels.

"Current repossessions in Ireland accumatively since the bubble burst are less than 1,500, if we apply the rates we've seen in the UK it would be closer to 20,000.2