|
|
|
Real Estate News Releases
|
(EMAILWIRE.COM, January 14, 2009 ) The word holiday usually brings a smile to our faces as we dream of suncream and sand, sightseeing, safari or ski slopes. Sadly, this holiday season, there is a very different break on the horizon – one which more than two million UK borrowers will not be looking forward to…
The GovernmentÂ’s recent announcement to offer cash strapped mortgage customers a two year freeze on interest repayments on their mortgage may appear a blessing but could actually be the nightmare before Christmas.
A whopping 729,054 people claim they are considering or have already taken a taken a holiday because they are expecting to be made redundant.
Research from online comparison service uSwitch.com shows the figures to be even higher - revealing that more than two million borrowers are considering taking a mortgage payment holiday.
Following the 12 month ‘holiday,’ their monthly repayments could be collectively pushed up by £54 million, increasing their total interest by £7.2 billion.
The break will see a £150,000 mortgage increase by more than £10,000, with monthly repayments going up by £80.
All this mortgage holiday will do is help in the very short term, but long term it will only hinder, merely postponing the inevitable and raising your mortgage when you do come to pay it off.
But, with1,522 people currently becoming unemployed in the UK each day, many of them will have no choice but to take up the offer of the 12 month break.
As house prices are predicted to fall further in 2009, those borrowers who have less than 25 per cent equity in their home run the risk of tumbling into negative equity.
Two leading mortgage providers, Nationwide and Halifax, have reviewed their policies on payment holidays and the latter no longer offers it as an option to those who have been made redundant, as they believe it will be damaging and force people into financial dire straits.
Nationwide is considering a new rule that will only allow consumers with at least 25 per cent equity in their property to take a payment holiday.
What about repossessions?
The Council of Mortgage Lenders (CML) has issued a dreary forecast for next year -predicting that around 75,000 people will have their homes repossessed during 2009 and the number of people unable to keep up with their mortgage repayments will more than double.
Currently, the number of people unable to pay their mortgage each month sits at 210,000. The CML is expecting that figure to rise to a whopping 500,000 next year.
A Spokesman for the CML said, “Despite the work the Government and industry are doing, 2009 is going to be a very tough year for the UK mortgage market.”
“We expect net lending to turn negative for the first year since records began in 1964, meaning that consumers will repay more on their mortgages than they borrow.”
Net lending is expected to shrink to minus £25 billion, as new lending fails to keep up with repayments.
For more information on international money and the market in general, please visit http://www.themovechannel.com/money/
-ENDS-
Notes to editors:
TheMoveChannel.com is a property website that was founded in 1999 as an online resource for buying, selling and learning about property. It now receives as many as 300,000 visits per month and advertises over 50,000 properties in nearly 90 countries, which are listed by over 500 partner organisations.
For further information as well as images and interview possibilities, please contact:
Dan Johnson
Managing Director
www.themovechannel.com
0207 952 7650
TheMoveChannel.com
Jon Moore
020 7952 7658
j.moore@themovechannel.com 
|
|
|
|
Real Estate News by Sector
|
|
|
|
|
