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Northerners at more risk of mortgage arrears‎

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01/06/2012
Northern mortgage payers are a third more likely to suffer mortgage arrears, analysis has shown.

Of borrowers in the north, 4.4% were in arrears, compared with about 3.4% in the south in Q4 2011, a report from Standard & Poor’s (S&P) has shown.

CHL buy-to-let arrears drop in Q3The news comes at a time when northern regions are also struggling with lower employment rates and cuts to public services, said S&P.

The North West of England was worst affected by mortgage arrears, at 4.7% of mortgages. Yorkshire and Humber and the East Midlands followed close behind, at 4.4%.

The northern regions also suffered in terms of negative equity, accounting for over half of the increase between Q2 2010 and the end of 2011. Negative equity was above 11% in the North East and North West, compared to 3% in the South East.

London house prices were dramatically higher than all other regions, increasing by 6.7% year on year in Q4 2011 compared to a national average of 1%.

The report argued that northern regions were bearing the brunt of rising UK mortgage arrears.

It said: “While decreasing equity does not immediately reduce a borrower’s ability to service their debt, it tends to limit their ability to refinance – or sell the securing property – to clear their mortgage.

“Such borrowers can be vulnerable to interest rate rises, and may also have difficulty moving house to pursue employment opportunities.” SVR hikes to push average mortgage payments up by £630

Approximately 1m householders will have their mortgage repayments upped by an average of £630 a year after several lenders’ increase their SVRs next month.

Lenders planning to increase the rate, including Halifax and RBS, justified the move as a reaction to higher funding costs, the Metro reported this morning.

Two-year fixed-rate deals have already risen to 4.15% from an average low of 3.82% in October.

According to the price comparison website, MoneySupermarket, a borrower with a £150, 000 mortgage agreeing a new deal will pay an average of £320 extra a year.

The Council of Mortgage Lenders predicted that 45,000 homes would be repossessed in 2012, a rise of 8,800 from the 36,200 repossessed last year.

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