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One-In-Five Homeowners Struggling To Pay Mortgage

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One-in-five homeowners struggling to pay mortgage

The number of people struggling to pay their mortgage has nearly doubled during the past year, a housing charity said today.

Almost a fifth of homeowners said they now faced a constant struggle to keep up with their home loan repayments, up from just 10 per cent a year earlier, according to Shelter.

The group warned that the situation was likely to get worse going forward as interest rates rise, unemployment increases and inflation remains high.

The research comes as the Council of Mortgage Lenders is due to release figures showing how many homes were repossessed during the third quarter of the year.

The group has revised down its forecast for how many people will lose their home this year to 39,000, from its previous estimate of 53,000, following three consecutive quarterly falls in repossession levels.

It also expects 175,000 people to end the year with mortgage arrears of more than 2.5 per cent of the outstanding sum of their loan.

But Shelter said although the level of repossessions was not as high as previously predicted, thousands of people were still losing their home every month.

It added that the number of people who were in mortgage arrears of 12 months or more had more than trebled during the past two years.

Campbell Robb, chief executive of Shelter, said: 'Clearly this shows what a difficult year it has been for many homeowners, with thousands of people literally hanging on to their homes by the skin of their teeth.

'With potential interest rate rises, higher unemployment and steep increases in food and fuel bills on the horizon, it seems unlikely things are about to get easier for homeowners any time soon.

Overstretched: The number of people struggling with mortgage costs has leapt up from one-in-ten previously

Overstretched: The number of people struggling with mortgage costs has leapt up from one-in-ten previously

'With so many homeowners in serious difficulty, the pressure could become too much and unless we take urgent action we may well be faced with a sudden surge of people at risk of losing their home in the coming months.'

Despite the recession, fewer people have lost their homes than expected due to a combination of low interest rates, increased lender forbearance and the introduction of Government schemes to help people who were struggling to keep up with their mortgage.

The former government launched a raft of initiatives to help struggling homeowners, including the Mortgage Rescue Scheme, under which people can sell some or all of their home to a social landlord and rent it back, as well as the Homeowner Mortgage Support Scheme, which enables people to defer paying interest on up to 70 per cent of their mortgage for up to two years.

It also introduced a pre-action protocol, under which the courts can grant a repossession order only if all alternative measures to keep people in their homes have failed.

The Ministry of Justice is also due to publish figures on repossession orders granted by courts in England and Wales during the third quarter.

The Shelter survey by YouGov involved 2,234 people being questioned during August

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  • 417 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
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      • Even
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      • up 5%

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