‘ALMOST a million people could have their homes repossessed because they have no way of paying off their interest-only mortgages,’ Citizens Advice warned yesterday.
New research from the national charity estimates 934,000 people have interest-only mortgages and do not have a plan on how to pay it off when their term ends. Citizens Advice said: ‘Time is running out for some people who will either have to sell their homes, find the capital to pay off the debt or could risk having the property repossessed.’
The average shortfall was previously estimated to be £71,000. The charity says that in the UK there are 3.3 million mortgage holders who have interest-only mortgages. Gillian Guy, Chief Executive of Citizens Advice, said: ‘People buy a home for stability, but interest-only mortgages have forced many into a financial black hole.’
The shortage of affordable housing will mean 3.7 million young people living with their parents in 2020, an increase of 700,000. The National Housing Federation (NHF) warned that the Tory government’s ‘Help-to-Buy’ scheme, which hands first-time buyers a mortgage while only asking for a 5% deposit in return, is risking a housing crash.
NHF said: ‘But making mortgage deposits cheaper to aspirant homeowners without increasing housing supply doesn’t tackle the root of the problem. It simply risks creating another housing bubble where prices are pushed up … Britain must get building again now. The future of the country and our young people depends on it.’
