Mortgages Uncovered

Statistics show that over 60K households are falling to negative equity and thousands of families are facing repossession. After last night and taking into account the figures, government is now under pressure to push its plans through faster in its bid to rescue some families who face losing their homes right now.

There are some analysts who claim that this situation is yet to get much worse than it was previously during the recession in early 1990, should house prices continually fall during the course of the next 24 months. Figures show that there could be double the amount of people who may experience negative equity in comparison to the peak during 1995 of 1 million.

Vince Cable, Liberal Democrat Treasury spokesman claimed that the government needs to quickly consider bringing forward its measures which are designed to aid unemployed homeowners. Whilst he commended government plans for providing benefits in covering interest on unemployed mortgage payments for home owners after only 13 weeks of losing their job, rather than the current 9 months, he still thinks that more clarification is needed regarding when the new ruling will take effect:

“In the meantime thousands of people could needlessly be thrown out of their homes.”

Figures also show that the number of new mortgages that were taken in 2007 was over 2 million, however, only 377K people purchased private insurance to cover mortgage payments should they be left unemployed or ill.

The amount of unemployed now claiming benefits jumped sharply in September to 940,000. There has been a 15% fall in house prices since the peak last year, however, some experts are now saying that this could rise still to 50% by 2011. The CML now predicts that a total of 45,000 properties will end up being repossessed this year alone which is around 26,200 more than last year.