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More mortgages in arrears, according to experts
29 May 2008
An increasing number of people are set to get into mortgage arrears due to the credit crunch, according to the Council of Mortgage Lenders (CML).
Rising food and fuel costs coupled with higher mortgage rates has meant that more borrowers cannot afford their monthly mortgage payments.
Bernard Clarke, spokesman for the CML, said: "It's a combination of higher borrowing costs and disruption to income streams, we’ve got nearly 12 million mortgages so there are always some people who are suffering payment problems."
Despite the negative forecast, the economy will not experience the same difficulties of the early 1990s because of lower and more stable borrowing costs.
"We are still not likely to see a price correction of the magnitude that we saw in the 1990s and neither is there any expectation that there will be the increase in unemployment that we saw back then," said Mr Clarke.
According to the CML, the number of possessions taken by first-charge mortgage lenders will rise from 27,100 last year to 45,000 this year.
