More people in need of debt management as mortgage debt soars
More people in need of debt management as mortgage debt soars
Friday 15th May 2009
Some 12,800 properties, including buy-to-let, were repossessed by first-charge mortgage lenders in the first three months if this year, up from 10,400 in the last quarter of 2008 and 8,500 in the first quarter of the same year.
More people are now in need of debt management solutions because the percentage of those who have fallen behind by more than 2.5 per cent of the mortgage balance has increased by 12 per cent.
There are now 205,300 people in this position, according to the figures, which indicates a 62 per cent jump on the 127,000 in the first quarter of 2008.
Commenting on the data, CML director general Michael Coogan said despite the obvious rise in repossessions, the rate is slower than expected and the organisation will revise downwards its prediction of 75,000 people losing their homes this year.
He also stated that lenders are willing to help borrowers if they are ready to cooperate with them, adding "it is quite clear that the number of arrears cases is rising far more markedly than the number of repossessions".
"Lenders are demonstrably increasing the forbearance they are offering, while many struggling borrowers have gained some breathing space through lower interest rates feeding through to lower monthly payments," he said.
The increase in those falling behind in payments is likely to impact the current average household debt in the UK, which debt charity credit action states stands at £58,350, including mortgages.
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