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Rising unemployment to drive repossessions

Monday 23rd March 2009

The huge rise in unemployment in February could have a serious impact on homelessness and house repossessions, experts have warned.

Data released by the Office for National Statistics has shown that unemployment has now passed the 2 million mark – and there were 130,400 more unemployed claimants in February than there were a month earlier.

This was the largest monthly rise since records began in 1971, bringing unemployment to 2.03 million or 6.5 per cent of the working population.

Financial consultancy the Prospects Service said 2009 is ‘likely to be the toughest year for the United Kingdom economy in the post war era’.

A spokeswoman for the Council of Mortgage Lenders said the unemployment levels would add to the high repossession rates.

‘One of the reasons why we have stuck with our forecast of 75,000 repossessions this year, despite the initiatives to dampen down repossessions, is that we anticipated a rise in unemployment which is what we are seeing,’ she said.

Adam Sampson, chief executive of homelessness charity Shelter, said the problem of rising unemployment put continuing pressure on stretched households.

‘These figures once again underline the scale of the crisis facing Britain’s homeowners, and with thousands facing unemployment, there is little evidence that things will get any better during this year,’ he said.