Thirty percent rise in mortgage arrears
October 13, 2009
A recent report has shown that although the base interest rate has fallen to its lowest level in history, at just 0.5 percent, the level of mortgage arrears in the UK has soared by 30 percent over the past year.
In the second quarter of this year another 51,000 homeowners are said to have fallen behind on their mortgage repayments by at least three months. In the first quarter of the year more than 60,000 fell behind with their mortgage by at least three months.
There are now over 400,000 people that are behind with their mortgage repayments by at least three months, and there are fears that this will lead to an ever increasing number of repossessions.
There has also been an increase in the amount that is outstanding on the average mortgage that is in arrears, with the average amount increasing from £4916 a year ago to £5525. With unemployment set to continue increasing some industry officials have said that there could now be a new wave of repossessions.
One official from the housing charity Shelter expressed her concerns, stating: “The increase in mortgage arrears, coupled with rising unemployment, shows the risk of a second wave of repossessions is greater than ever. As people fall into arrears it is vital they get advice as early as possible to give them the best chance of keeping their home.”
In the meantime government officials claim that around three hundred thousand homeowners have been helped by various government initiatives that have been put into place to help struggling homeowners. Government officials added that they are still putting pressure on banks to help homeowners that are struggling rather than opting for repossession action.
Between April and June of this year there were 13,610 repossessions, which was 9 percent lower than the first quarter of the year but 23 percent higher than the same period last year.
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