Fears for homeowners with soaring arrears
Rocketing mortgage arrears are piling on the agony for thousands of struggling homeowners and seriously damaging their prospects of avoiding repossession.
Recently released figures from the Council of Mortgage Lenders showed that, while repossessions had dropped a little last quarter, there was a slight increase in the number of people across the UK with mortgage arrears of more than 10% of their outstanding balance.
Shelter Scotland’s legal team, which advises and represents people facing repossession in court, says these figures match their recent experiences – with the majority of cases now seen by the team in Scotland running at more than £10,000 in arrears and hitting £20,000 to £30,000 in some cases.
Shelter Scotland’s Principal Solicitor Eleanor Hamilton says their work to help people avoid repossession is being made harder by these unprecedented levels of arrears.
Shelter Scotland has just launched its Christmas campaign to increase awareness of the threat of homelessness – faced by all in danger of repossession - and to raise funds to be able to continue offering expert help at a time when funding for vital support services is under threat.
Eleanor Hamilton says: “The number of mortgage holders in the UK with arrears of more than 10% of their outstanding balance has risen to 29,000 - indicating that things are getting worse for people in this bracket.
“The majority of cases we now see are homeowners struggling with arrears of more than £10,000 – and increasingly we are dealing with arrears in the £20,000 to £30,000 bracket. And while lenders are still showing forbearance with arrears, as the level increases into five-figure sums, in our experience, the likelihood is that they will move to repossess a property.
“Our team of housing and legal experts can help people avoid repossession. We can negotiate payment plans with lenders and, where required, represent them in court. But stopping repossession is so much harder when arrears are in the tens of thousands.
“I urge struggling homeowners to take action sooner - stick to agreed payment plans, begin discussions with lenders before their arrears become unmanageable and get advice early.”
Shelter Scotland’s legal team says there is a toxic mix of factors making the fight against repossession tougher, including:
- Homeowners seeking help too late
- Mortgage holders not sticking to agreed payment plans
- Lack of job and income security – changing jobs and hours more often
- Not qualifying for the Mortgage to Rent scheme
- Homeowners simply not being able to afford the cost of putting their homes up for sale
Anyone struggling with their mortgage should call Shelter Scotland’s free helpline on 0808 800 4444 to get expert legal help and money advice.
