One in four worry about having their home repossessed
The consumer group has revealed an increasing gap between homeowners aged 30-49 who bought their homes recently and younger people who can’t get on the property ladder.
The report highlights that many people in the 30-49 age group are ‘mortgage prisoners’ trapped in their current mortgage deal, unable to switch when rates increase.
This group has the greatest housing related costs, spending on average £186 a week, compared with the national average of £135.
Which? executive director Richard Lloyd said: “The housing market is failing not just one but two generations of consumers, with many mortgage prisoners trapped on their current deal and young people excluded from the housing market altogether.”
The Quarterly Consumer Report also revealed that homeownership is increasingly out of reach for first-time buyers with rising rents making it harder for people to save for the large deposits needed.
More than half of people under 30 who don’t own a home are worried about getting on the property ladder.
Lloyd added: “The Chancellor must put tougher obligations on banks that get cheap finance through the Government’s Funding for Lending Scheme so that more is done to help those who are struggling through no fault of their own, and especially to ensure that mortgage prisoners and first-time buyers can benefit from lower borrowing costs.”
Lenders have also increased mortgage arrangement fees, which have risen by around 60% in the past eighteen months to an average of £1,472 in August 2012.
Which? says that despite the Government’s efforts to ease problems in the housing market through the Funding for Lending scheme, where banks and building societies are being given access to cheap funds in order to lend lower cost loans, more than 1.6m people with mortgages have been hit by increasing Standard Variable Rates on their mortgages.
It calculates that borrowers are now paying about £400m a year extra as a result, despite the Bank of England Base Rate remaining unchanged for more than three years.