Workers Revolutionary Party

MORTGAGE CRISIS – one in five can’t make mortgage repayments in 2008

one in five mortgage holders is worried about meeting their repayments over the next 12 months, while a quarter of these haven’t any idea of what to do about the situation, the Financial Services Authority (FSA) reported yesterday.

Responding to the survey a TUC spokesman told News Line: ‘This just shows why union members cannot afford to accept below inflation real-term pay cuts over the next few years.

‘What we need is for wages to keep pace with the rise in living costs.

‘The findings of this survey reinforce the need for a fresh start on public sector pay.’

The FSA poll of 2,011 people aged over 16, of whom 573 were mortgage holders, found that 19 per cent of those asked said that they were concerned about meeting the cost of their mortgage repayments.

And a quarter of those do not have any plans for dealing with the issue, the poll for the financial regulator found.

The FSA said it is launching a £2 million advertising campaign and an advice guide for homeowners, concentrating its campaign on householders whose fixed-rate deals are coming to an end this year.

‘Economic conditions are getting tougher, putting pressure on family finances,’ said Chris Pond, FSA director of financial capability.

Last month, the Council of Mortgage Lenders (CML) said repossessions soared 21 per cent in 2007 to 27,100 homes, the highest figure since 1999.

But that is nothing to what is expected in 2008 with many fixed rate mortgages coming to an end, leaving tens of thousands of mortgage holders facing huge increases in their monthly payments.

The CML said the numbers of mortgages behind on payments rose by 8.6 per cent last year, compared with 2006.

The CML said it expects the number of homes repossessed to rise even further in 2008, as the credit squeeze continues to tighten.

Responding to the FSA story that one in five mortgage holders are worried about meeting mortgage repayments, Shelter chief executive Adam Sampson said: ‘80,000 people have already sought Shelter’s help with mortgage problems in the last year, up 10,000 from 2006.

‘This is why we are calling on the government and mortgage lenders to urgently set up a free, confidential advice service to help the growing numbers of homeowners hit by mortgage arrears and repossession.

‘We also urge anyone facing repossession to talk to their lender as soon as they get into difficulty, and to seek independent advice from Shelter at www.shelter.org.uk or on 0808 800 4444.’

A separate study by the Centre for Economics and Business Research for Asda supermarket, suggested that families were £5 a week worse off this January compared with a year ago, because of soaring petrol and food prices.

• Meanwhile, there is bad news on the oil front. The head of OPEC, the cartel of oil-producing nations, has said it is unlikely to increase production at this week’s meeting.

It had been hoped members would boost the supply of oil to help prices fall from their historically-high levels.

The price of a barrel of oil reached another record of almost $104 during trading on Monday in New York.

Oil ministers from Opec member nations are gathering in Vienna for their meeting which starts today.

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