Foros de la Plataforma por una Vivienda Digna

[billy]

HUNDREDS of thousands of homeowners are failing to keep up with mortgage repayments, raising fears that they may lose their homes, as inflation rose yesterday to its highest in nearly two years.
About 770,000 households are believed to have missed one or more mortgage payments in the past 12 months. Last night economists gave warning that the situation would worsen as interest rates are expected to rise before the end of the year.



Figures out yesterday showed that inflation rose to 2.5 per cent in August, the fourth time in a row that it has exceeded the Government’s 2 per cent target. The Bank of England is expected to have little choice but to raise interest rates from 4.75 per cent as a result, forcing more homeowners into arrears.

A survey of 2,000 mortgage holders, conducted by NOP for Citizens Advice, found that first-time buyers in particular were struggling to meet monthly payments. Thirteen per cent of those under 24 in the survey, many burdened with student loans and credit card debt, said they had missed a payment in the past year. Four per cent of all those surveyed missed one or more mortgage payments in the last year, which Citizens Advice says equates to 770,000 households nationally.

Other figures show that first-time buyers are particularly vulnerable to another rate rise because they are borrowing more than ever. The Council of Mortgage Lenders has said that first-time buyers are borrowing an average of more than three times their salary, the highest income multiple on record. Citizens Advice says that its survey raises questions over the conduct of banks and other lenders which appear to be making huge loans to customers regardless of ability to pay.

The charity has dealt with 51,000 inquiries about arrears on mortgages and secured loans over the last year. Officers say that they have not seen problems on this scale since the last recession in the 1990s.

Official statistics, which record mortgage arrears of six months or more, also show that more and more homeowners are getting into trouble. More than 35,320 mortgages were in arrears in June this year, the highest since 2001, the Council for Mortgage Lenders said.

David Harker, chief executive of Citizens Advice, said: “There is a clear need for more information and advice about the consequences of taking on financial commitments, particularly for younger adults.”

Repossessions have risen to 8,140 in the past six months, their highest since 2001.

The charity will urge lenders today to carry out proper checks on customers to make sure that they can genuinely afford their repayments.

Mr Harker will single out for criticism mortgage brokers and so-called “sub-prime lenders” who lend to people with poor credit histories. “Promises of quick decisions, easy monthly payments and help for people with bad creditratings or mortgage arrears look very attractive. Celebrity endorsements could also lull people into a false sense of security. But these can detract from the vital small print that loans may be secured against your home and that you could lose it if you miss payments.”

Christopher Dean, for the Council of Mortgage Lenders, said that young people were relying increasingly on their parents to help them to buy a property. “Young people are stretching themselves in order to get started, but they are often getting help from the parents. to help them to meet their payments.

“It shows how important home ownership is that people are willing to borrow so much,” he said.

Ben Broadbent, senior economist at Goldman Sachs, predicted that mortgage arrears would carry on rising for the next year or more. “The number will get somewhat worse because interest rates are going to go up. Some of those already stretched will be unable to make their payments.”
http://www.timesonline.co.uk/article/0,,2-2355597,00.html