UK homeowners finding debt arrears easier in second recession
UK homeowners are finding it easier to pay back mortgage debt to lenders after falling into arrears than they did in the previous recession, according to law firm Irwin Mitchell.
Analysis of 24,000 homeowners found that the number that paid off some of their mortgage arrears increased 11.1 per cent quarter-on-quarter in the second period of 2012 to 60.3 per cent.
The Domestic Arrears Report compared that figure with the previous recession, in the third quarter of 2009, when the figure was just 36 per cent.
It represents a record high during the recession hit years, with the previous best quarter, Q1 2012, at 54.32 per cent.
Niall Gilhooley, chief executive at Ascent, which carried out the analysis on behalf of Irwin Mitchell, said: “Taking into account the levels of uncertainty in the economy and a fall in disposable income caused by falling wages and rising VAT, it is very pleasing and encouraging to see that homeowners are still more likely to accept a debt counseling visit.”
Gilhooley also said the amount that those who have fallen behind with their mortgage payments are paying back has increased.
Of the 2,652 who received a visit or telephone call from a debt counsellor during the period, almost 43 per cent paid back more than one month’s mortgage repayment, a 37.5 per cent increase on the number that did the same in the second quarter of 2011.
Meanwhile, 4 per cent cleared their arrears completely in the quarter, while less than 1 per cent achieved this in 2009.