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UK Homeowners Risk Losing Homes Due to Mortgage Arrears

According to the Citizens Advice Bureau, hundreds of thousands of UK homeowners risk losing their homes as they fall behind with their mortgage repayments.

In the past year 770,000 people have missed one or more monthly repayments, with one in ten of the 2,056 people interviewed for the survey under the false impression that missing repayments did not put their home at risk.

David Harker, chief executive of Citizens Advice, said: “ We are very concerned about the number of people who are missing payments.

“ Missing payments on mortgages or secured loans could lead to arrears and possibly repossession.

“ There is clear need for more information and advice about the consequences of taking on financial commitments, particularly for younger adults.”

The survey revealed that younger people in the UK are more likely to fall behind in meeting their financial commitments.

The survey also uncovered that of those surveyed, 11% mistakenly thought that a secured loan allowed them to miss repayments without their home being at risk from repossession.

As the UK faces unprecedented levels of unsecured personal debt, the survey highlights another area of concern as two million people fear they will be unable to keep up with their monthly payments.

Mr Harker added: “ If people are considering becoming homeowners they need to understand clearly what they are taking on.

“ We don’t want people to borrow far more than they can afford.”

Citizens Advice offices dealt with a whopping 1.25 million debt queries last year, with bankruptcies on the rise as people struggle to repay their debt.

Prudent advice for those who have fallen behind with their mortgage repayments or envisage they might in the future should get in touch with their lender as soon as possible to discuss a possible plan of action to the benefit of both parties.

Also, consulting a debt councillor, such as the Citizens Advice, will prove helpful, as they can help with restructuring your debt and coming up with a debt plan, which will go a long way to making sure, your financial commitments are met.

The worst thing people who are struggling with debt can do is ignore the problem and let it mushroom out of control. There is plenty of help and advice out there for those who feel there is no light at the end of the tunnel.

Alisdair Milton
20th September 2006

More Information:

  • Repossession – How and Why
    Your home is the security the lending company holds in case you stop making repayments into your mortgage. The worst that can happen is, they will repossess you house. But why does this happen?
  • The Dangers of Negative Equity
    The great thing about buying a property is that it’s a guaranteed investment, prices just keep going up, right? Wrong. We look at what happens when the bubble bursts and prices drop.
  • Your Home Is At Risk If..
    “Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it”. Words that have to be printed on any promotional material for mortgages or home-owner secured loans. Is this the only reason you should keep paying your mortgage?
  • Mortgage information from the FSA


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