Mortgage worries on the rise

18 March 2008 / by Rebecca Sargent
The Citizens Advice Bureau (CAB) has seen a 35 per cent rise in the amount of mortgage related queries it has received.

According to the latest statistics, 73 per cent of all CAB offices in England and Wales reported dealing with 215,000 new debt queries in January and February of 2008.

The figures reflect the recently reported credit crisis, and the effects this has been having on everything from household bills to mortgages.

Concerns about mortgage repayments coincide with the Financial Services Authority’s (FSA) recent research, which stated that one in five mortgage holders are concerned about meeting their repayments over the next twelve months.

As the cost of living rises, the CAB has also reported an increase in the amount of people struggling with their general household bills. USwitch statistics show the average household energy bill is now £1,026, which is a 13 per cent rise since last year.

Debt, including mortgage arrears, now accounts for almost one in three of all enquiries received by the CAB. According to the FSA, 1.4 million fixed rate mortgages are due to come to an end in 2008. Consequently, there will be millions of people attempting to remortgage and finding themselves paying higher rates than before.

Mortgage experts, John Charcol, recommend shopping around up to seven months before your deal comes to an end, spokesman, Ray Boulger comments: "As lenders change rates increasingly quickly, with most new rates higher than the ones they replace, borrowers who want to remortgage should start to investigate their options as much as 6 or 7 months before their current deal ends, because some mortgage offers are valid for 6 months, although others only last 3 months."

As a result of impending rises in mortgage repayments and rates, the FSA has launched a £2 million advertising campaign, aimed at helping consumers to find the right mortgage or remortgage deal.

Nevertheless, the recent trend in queries to the CAB is a clear indicator of the nations increasing financial related woes.

Teresa Perchard, Director of Policy for Citizens Advice said: "It is a worrying trend that our bureaux are reporting a very sharp increase in the number of mortgage arrears problems they are dealing with.

"These latest figures paint a worrying picture, suggesting a significant number of households are struggling to meet their most basic living costs.

"The combination of big increases in household bills, especially fuel, and rising housing costs is putting additional pressure on people’s finances when they are already stretched to the limit."

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