This is the view of Ian Long, director of St Trinity Asset Management, who commented: “With the government’s axe falling heavily on the public sector, nearly half a million public sector employees will face unemployment in the next four years.
“Although the government hopes that private sector growth will be able to counterbalance the losses, it’s unrealistic to expect it to absorb such a large percent of the workforce.
“It’s inevitable that thousands of households will come under intense financial pressure over the next four years. And this is going to push up mortgage arrears and possessions.
“Until now, possessions have performed above expectations, with 23% less in the first half of the year compared to 2009.
“Interest rates will only go one way over the medium-term and this will heap additional pressure on borrowers trying to keep up with their mortgage payments.
“The effects will be widespread, but will vary across the country. Regions like the North East which have a greater dependence on the public sector for jobs will be disproportionately hit by the cuts – and their knock-on effects on owner occupation.”
