Mortgage difficulties 'will continue long after upturn'

18/09/2009

A significant proportion of UK households will carry on struggling to make their mortgage repayments long after the economy has returned to normal, it has been claimed.

Just this month, the Financial Services Authority (FSA) reported that the number of homes being repossessed fell by nine per cent over the second quarter of the year when compared to the preceding three-month period.

At the same time, however, the number of people falling into arrears with their mortgages has risen, with the Money Advice Trust (MAT) now explaining that this trend is likely to continue for the foreseeable future, even if, as is widely expected, the UK economy soon climbs out of recession.

MAT advisor Beccy Boden Wilks explained: "Even if we are coming out of a recession and it's agreed that that is happening, whatever the indicators of that are, we're still going to see a lag between [recovery and] people being able to afford their mortgage payments and people getting back into work.

"People will still be feeling the effects of the recession even when we are coming out of it."

These comments come soon after the Building Societies Association (BSA) reported that the majority of people falling into arrears still manage to stay in their homes.

A third of borrowers have paid off their debts in full, while 12 per cent have worked out a solution with creditors.

Tags; Housing Debt and Bills,

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