Mortgage crisis. A survey of lenders finds the biggest increase in mortgage defaults since 2009
While Prime Minister Rishi Sunak with all his millions in the bank says we will get through the mortgage crisis, it has been reported that 2023 has seen the biggest rise in mortgage defaults since 2009.
The Bank of England’s Credit Conditions Survey also reported that the number of people who will apply for a mortgage will drop in the third quarter. Mortgage brokers have already reported fewer people are coming to them to apply for a mortgage.
The problem of people defaulting on their mortgages will continue to rise while the interest rate continues to rise with no signs of stopping.
The report also found that more than one million homeowners can expect to see their mortgage monthly payments increase by £500 or more by the end of 2026.
We reported in June that more than 700,000 homeowners failed to pay their mortgages, with fears that the number of people who would struggle to pay their mortgages in July would increase. That fear is now becoming a reality with people around the country including London, Manchester, Grimsby, Boston, Liverpool, and Skegness seeking urgent mortgage advice.
The Bank of England’s Credit Conditions Survey found mortgage defaults in the three months to the end of May leaped to 30.9 on its index, up from 14 in the first quarter of 2023.
With the rising interest rate, the findings also reported that the cost of mortgages could rise by £500 or more a month for nearly a million homeowners by the end of 2026.
The current Bank of England Base Rate is 5.00% with the Standard Variable Mortgage Rate is 7.00%. and the Homeowner Variable Rate is 8.49%. However, we have had people contact us who have said their mortgage rate is much higher.
A worried homeowner from Lincoln who contacted In2town Today News said her current mortgage interest is more than 9%. She was with Kensington Mortgages, but like tens of thousands of others, her mortgage was sold to Engage Credit.
“Since our mortgage was sold to Engage Credit in June 2022, we have seen our mortgage interest rate rocket. Now, we are stuck with them and cannot remortgage to a cheaper company. We are shocked and angry that our old mortgage company could sell our mortgage to a company that doesn’t care about their customers.”
Some charities have warned that more people could lose their homes with the lack of help from the banks and the Government. According to research from the Liberal Democrats, one in two mortgage borrowers fear they could lose their home.
Liberal Democrat leader Ed Davey says: “Millions of homeowners are worried about losing their home as a result of soaring mortgage rates.
“It’s clear we need targeted support to prevent families losing their homes through no fault of their own. There is a mortgage ticking time bomb about to go off and it cannot be ignored any longer.”
