Mortgage misery for a quarter of a million
The number of borrowers missing mortgage payments is rising. Donna Werbner reports
More than a quarter of a million people are at risk of losing their homes and ruining their credit ratings, say Citizens Advice.
Around 770,000 people have missed at least one of their mortgage repayments in the last 12 months, a survey by the consumer advisory organisation reveals.
Younger people are particularly at risk, with 13% of 21-24 year-olds admitting they had failed to pay at least once.
“Missing payments on mortgages or secured loans could lead to arrears and possibly repossession,” says David Harker, chief executive of Citizens Advice.
“There is a clear need for more information and advice about the consequences of taking on financial commitments, particularly for younger adults.”
Part of the problem, the survey suggests, is that some people don’t even understand what secured lending is – and many do not realise that missing payment could lead to them losing their homes.
One in 10 people thought that a secured loan was a loan where the borrower ‘can miss payments and their home will be safe’, when in fact it is quite the opposite.
Mortgage lenders have come under fire for the way they advertise secured loans in newspapers, radio and TV adverts.
“Celebrity endorsements can lull people into a false sense of security and detract from the vital small print that you could lose your home if you miss payments. Companies need to make this information clearer,” argued Harker.
The survey also found that 42% of people who rent want to buy their own house but feel they are unable to afford it.