Mortgage News Mortgage Arrears Up 31 Per Cent 3094
Mortgage arrears up 31%
18 March 2009 / by Rebecca Sargent
The lending figures show that in the last quarter of 2008, there were 377,000 mortgage loans in arrears, an increase of 10 per cent since quarter three, and a 31 per cent increase year on year.
The FSA said: “With borrowers increasingly struggling to clear their arrears, the total number of loan accounts in arrears has been steadily increasing since early 2007.”
However, despite the rise in arrears, the data also shows that the number of new possessions actually fell by 436 between quarter three and quarter four in 2008.
Mortgage lending also fell in 2008, down 48 per cent year on year, with a decline from £102billion to £45billion between quarter three and quarter four.
Commenting, Richard Mason, managing director from Moneyextra.com said: “The increase in mortgage arrears is of no surprise, and was expected after the Government’s intervention last year which saw lenders delay taking action against customers that fell into arrears for six months.
“For those people struggling to keep up with mortgage payments, immediate action is the best remedy to avoid having your home repossessed, and we urge struggling homeowners to inform their lender as soon as possible of their financial situation.”
Speaking to building society mortgage customers, Paul Broadhead, head of mortgage policy at the Building Societies Association (BSA) said: “Every repossession represents an individual tragedy, but borrowers with building society mortgages can be confident that their lender will, if they contact their lender as soon as possible, develop an individual plan to help them get back on their feet.”
Shopping around for the best mortgages can help avoid mortgage arrears, says Moneyextra.com’s Richard Mason: “Do your research beforehand and consider taking advantage of current low rates or locking onto a fixed scheme, which may help you better manage your out-goings, meaning you are less likely to default on mortgage payments.”
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