Citizens Advice has warned on increase in Mortgage Debt
Citizens Advice ‘Dealing with Debt’ Annual Report has launched. For the first time since the service began Mortgage Debt represents the largest debt amount at £9,038,508. This figure is an increase of 64% on the previous year and is the latest figure in an increasing trend year on year since the onset of the financial crisis in 2008. The total increase 2008-2011 is 1,801%.
The Mortgage Debt trends shown by ‘Dealing with Debt’ figures correlate with the latest figures from the Northern Ireland Court Service, which show a substantial increase in households facing repossession. For many reduced working hours and unemployment will represent an obstacle to meeting mortgage repayments. Many homeowners will see Bank of England base interest rate as a large increase to their Mortgage repayments, with an increase of 2% representing £3,000 per annum on an average interest only mortgage. Homeowners who are in a situation of negative equity may pursue bankruptcy as a solution to this Mortgage debt.
Derek Alcorn, Chief Executive of Citizens Advice said:
“It is very clear from the figures in our database that if interest rates rise, many people will find themselves in trouble with mortgage repayments, and there is some evidence that lenders are already lengthening the term of loans.”
The service is in its fifth year of funding by the Department of Enterprise, Trade and Investment. The service is accessible the website www.dealingwithdebt.org.uk or by calling 0844 855 2104. Calls are charged at the local rate.
Click Here to read the full report
Click Here to read press release.