More and more Britons are experiencing financial problems. Mortgage arrears in Great Britain rose by 13 percent in the second quarter of this year. This number is now at the highest level since 2016, the Guardian writes based on Bank of England figures.
“Mortgage collapse”
Because unemployment rates and loan interest rates have risen in recent months, more and more families are finding themselves in trouble. Sometimes they can no longer afford the monthly mortgage payments. Buy-to-let investors, who pay their mortgages with rents from tenants, are also being affected by economic distress across the country and are increasingly falling behind.
According to the Bank of England, total mortgage arrears have risen by 29 percent since last year to £16.9 billion (€19.6 billion). On the other hand, new mortgages are getting less and less.
The percentages have not been seen in more than a decade
“The speed at which mortgage arrears are growing is frightening. This should be discussed at the next Bank of England interest rate meeting,” Louis Shaw, a financial specialist, told Newspage. “This is terrible data, and we know it will get worse because of the 1.6 million Of homeowners who need to renew their mortgage terms in the next 12 months. They will have to pay a much higher interest rate, and therefore much higher monthly costs. These are proportions that have not occurred for more than ten years.”
Choosing between two evils
“We will see further payment delays, particularly in the buy-to-let sector,” says finance director Simon Gammon. “If landlords don’t make enough money to pay the mortgage, they have two options: sell or stop paying the mortgage, losing the home and potentially leaving them with remaining debt. If they choose to sell, they will have to wait a year for the lease with the current resident to expire They can also choose to sell the house including the tenant, but this is more difficult.
sources): Watchman