Five Million Mortgage Holders Under Threat!

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OVER five million mortgage holders – half the mortgage holders in Britain – could face eviction if interest rates go up and current government assistance packages are withdrawn.

That was the warning made yesterday by housing charity Shelter, which has written jointly with Citizens Advice, the Council of Mortgage Lenders, and the Building Societies Association to the new Tory chancellor, Osborne, and the Liberal Democrat business secretary, Caborne.

Shelter chief executive Campbell Robb said: ‘5.4 million mortgage holders haven’t even thought about how they will pay their mortgage if interest rates go up.’

Robb said that for many people ‘just keeping on top of their current mortgage repayments is a constant struggle.’

He said that hundreds of thousands of mortgage holders ‘desperately need the new government to continue the help that enables them to keep their homes.’

Robb warned: ‘Current support schemes in place are set to wind up at the end of the year but could be pulled at any time, which will leave many people with no safety net and facing the real possibility of repossession.

‘These schemes are directly helping homeowners everyday and there is no question they are making a real difference.’

Robb said that if the funding for these schemes is not urgently reconfirmed by the new government, then there is likely to be ‘a huge number of people losing their home by the end of the year.’

A survey published by Shelter yesterday showed that 29 per cent of mortgage holders were unprepared for the increase in mortgage payments ‘when interest rates inevitably rise’.

Robb added that mortgage holders needed more government assistance, not less, calling for help to be extended to ‘tens of thousands of people at risk right now’ and for ‘a long-term homeowner support programme’.

‘If we don’t extend these schemes soon, these people will simply have nowhere to turn when times get really tough, particularly if the extra advice funding is cut at the same time as demand increases,’ he concluded.

Shelter also warned that mortgage holders evicted from their properties by the mortgage companies are not automatically entitled to be housed by their local council.

But the charity did not issue a call for new council homes to be built to ease the housing crisis.

The charity said: ‘Many homeowners have difficulty paying their mortgages, often when they lose a job, split up with a partner or have unexpected expenses.

‘If you’re struggling to pay, you need to act quickly, even if the problem is only temporary.

‘Mortgage arrears don’t automatically lead to repossession but must be taken very seriously.

‘You can contact Shelter’s dedicated homeowner helpline on 0300 3300 515 or use our directory to find face-to-face advice services in your area.’

Shelter added: ‘If you rent your home and your landlord has mortgage arrears, you have far less protection and you should get advice immediately.’

Shelter warns that options such as voluntary repossession, sale and lease back schemes, and second mortgages and secured loans, are all ‘risky’.

Almost 50,000 mortgage holders had their homes repossessed in 2009 – the highest figure for 15 years.