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5.4m mortgage borrowers at risk if interest rates rise.

Article by Paymex 17th May 2010 00:00

Shelter and the Council of Mortgage Lenders (CML) have urged the new Government to take immediate action to help thousands of people at risk of losing their homes.
In a joint letter to the new Chancellor George Osborne and new Business Secretary Vince Cable, the organisations call for a clear commitment in the first budget to extend current support measures for borrowers in most financial difficulty. The letter has also been signed by the Building Societies Association.
Although the recent CML figures show that the number of repossessions in the first quarter of 2010 are down, this reduction is deeply dependent on current low interest rates and the time-limited policy measures currently in place.
Shelter chief executive Campbell Robb said: ‘Hundreds of thousands of homeowners desperately need the new Government to continue the help that enables them to keep their homes.
‘Current support schemes in place are set to wind up at the end of the year but could be pulled at any time, which will leave many people with no safety net and facing the real possibility of repossession.
He continued: ‘These schemes are directly helping homeowners everyday and there is no question they are making a real difference. If the funding for these schemes is not urgently reconfirmed the new Government are likely to see a huge number of people losing their home by the end of the year.’
A new survey released by Shelter today shows 29% of mortgage holders are unprepared for the increase in mortgage payments when interest rates inevitably rise.
Mr Robb said: ‘5.4 million mortgage holders haven’t even thought about how they will pay their mortgage if interest rates go up. We know for a significant number of people, just keeping on top of their current mortgage repayments is a constant struggle.
‘If we don’t extend these schemes soon, these people will simply have nowhere to turn when times get really tough, particularly if the extra advice funding is cut at the same time demand increases.’
He added: ‘One of the new Government’s first actions must be to extend these schemes to help the tens of thousands of people at risk right now and start working on a long-term homeowner support programme.’
(Source: Shelter press release)