UK home repossessions soar 71%

Homeowners in the UK, victims of the global financial crisis, are facing the same fate as their American cousins.

Property for sale signs are seen on a street in Croydon, south London, Wednesday, April 30, 2008. British house prices could fall by about a third unless interest rates are cut fast, a senior Bank of England official warned Tuesday. David Blanchflower, one of the nine members of the Monetary Policy Committee that sets the bank's interest rates, said house prices could fall by 30 percent unless the bank cuts interest rates, adding that the country faced a "real risk" of falling into a recession. (AP Photo/Sang Tan)
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Homeowners in the UK are the latest victims of the worsening global financial crisis and are sharing the same fate as their American cousins. The number of repossessions in the country rose by 71 per cent in the third quarter compared to the same period last year. A report released today by the Financial Services Authority said the dire situation was a symptom of the wider financial crisis and the country's collapsing housing market.

It said the downturn and credit squeeze had caused last year's rapid ascent of mortgage rates, leaving an increasing number of people unable to cope with their mortgage payments. The simultaneous fall in the housing market means that some own more on their mortgage than their house is worth, resulting in "negative equity" and leaving them unable to cancel their mortgage debt if they sell their homes.

Meanwhile, the British prime minister Gordon Brown announced today that he wants China and oil-rich Gulf states to offer money for an enhanced IMF bailout fund aimed at helping countries rocked by the global economic downturn. Mr Brown said that countries with the largest surpluses could "do most to help". "We must act now, we must set up the fund as quickly as possible," he said in London, ahead of talks on the crisis in Paris with the French president Nicolas Sarkozy. * Agence France-Presse