Six out of 10 borrowers in arrears due to unemployment or reduced income

Economic reasons that are outside the influence of the borrower are by far the main cause of people finding themselves in mortgage arrears. Unemployment and reduced income were the reasons six out of 10 borrowers were in arrears.

These findings come from White Horse Mortgage Services, which provides mortgage arrears counselling, has produced statistics showing the reasons people get into mortgage arrears.

The figures for 2011 show very similar results to the 2010 figures although there was a slight reduction in financial mismanagement which applied to 10.8% of borrowers in arrears. This was down from to 13.6% in 2010 and 17.8% in 2009.

The most common single reason for people having mortgage arrears is due to a reduced income, which had not been resolved. This accounted for 22.8% of people in arrears - one of the few areas where there was a rise from the previous year (20.1%). Borrowers with a reduced income, which had since been resolved, stood at 17.6% of the total.

Unresolved unemployment accounted for 11.5 % of people in arrears while unemployment which was now resolved affected 8.9% of struggling borrowers.

Relationship breakdown is the next most common reason for arrears at 8.3%, followed by long-term ill health at 6.75% and those with ill health who had recovered at 4.2%.

Unresolved over indebtedness accounted for 4.1% of arrears problems while over indebtedness that had been resolved accounted for 3.6%