UK Mortgage Payments Missed As More Borrowers Are In ‘Distress’
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The amount of mortgage payments missed this year is approaching the 500,000 barrier, new figures from Money Expert reveal.
According to research by the firm, some 460,000 repayments have been missed since the beginning of 2007 - an average of about 77,000 per month. However, following the decision by the Bank of England's monetary policy committee (MPC) to increase the base rate to 5.75 per cent this number could be set to rise further as the Bank looks to "pile on the pressure".
Despite the MPC having risen the base rate five times, by a total of 1.25 per cent, over the last year the financial services company pointed out that industry experts believe more increases could take place. Consequently, interest rates on tracker and standard variable mortgages have "inevitably" increased. Meanwhile, those coming to the end of their fixed-rate products are set to find their monthly secured loan repayments becoming "more expensive".
Chief executive Sean Gardner said: "Missing a morgage payment is a real signal of distress and anyone in such dire straits needs to address the issue as soon as possible. We are a long way from the dark days of the late 1980s and early 1990s when more than a million lost their homes but many are feeling the strain. Anyone who has missed a mortgage payment should for a start be talking to their lender and letting them know what is going on."
Mr Gardner added that such consumers should look to reduce their spending and cut debts as soon as possible. "That ought to mean sorting out their finances and getting all loans and credit cards under control," he added. The executive pointed to debt consolidation and taking out a secured loan against the value of property as a way of meeting demands for any outstanding mortgage payments.
Meanwhile, research carried out earlier this year indicated that some 36,000 homeowners defaulted on their mortgage every month over the duration of 2006, with this figure now predicted to be "close to doubling" by the end of this year. The financial company also pointed to figures from the Council of Mortgage Lenders indicating that some 59,000 mortgages were between three and six months in arrears as of the end of last year. Statistics from MoneyExpert also signified that those aged between 35 and 44 are the most likely to miss making a payment - with some three per cent said to have done so over the last six months.
Earlier today, Arthur Morgan, Sinn Fein spokesperson for housing, claimed that the government needs to take more steps to curb rising mortgage debt. "More can and should be done terms of mortgage interest relief to help protect vulnerable homeowners in particular those on average and lower incomes," he said. Mr Morgan suggested that government officials have reported that there is not a problem with affordability within the property sector despite the emergence of 100 per cent mortgages and "the fact that young couples were borrowing unprecedented sums at a time of historically low interest rates".
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Abbi Rouse writes for AllAboutLoans.co.uk, where our visitors can apply online for unsecured loans for tenants, and secured homeowner loans.
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