Those struggling with mortgages "have to prepare a budget"

17 July 2008

The Council of Mortgage Lenders (CML) has revealed a 21 per cent rise in the number of houses being repossessed, with figures hitting their highest since 1999.

This indicates a climb in the number of homeowners struggling with mortgage repayments, an issue the Consumer Credit Counselling Service (CCCS) is keen to address.

A spokesperson for the CCCS, Frances Walker, has said callers to their helpline presented a number of problems facing homeowners, for example the increase in inflation and living costs.

The credit crunch has made it more difficult for people to find new fixed-rate mortgages after coming off existing deals, said Ms Walker.

An additional problem is that many people have designated a large proportion of their disposable income on their mortgages.

"They`ve borrowed a lot, particularly the first-time buyers and the sub-prime buyer, so anyone who has got more than 20 per cent of their pre-tax income committed to mortgage, then that`s a problem," said Ms Walker.

CCCS said people struggling with debt should prepare a budget and seek professional advice.

The CML said 27,100 homes were repossessed last year.

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