Higher mortgage arrears today, lower house prices in the future.
UK homeowners are increasingly struggling to keep up mortgage payments, with the number of loan accounts in serious arrears in the third quarter of 2008 rising by nearly a quarter over the same period the previous year, according to data from the Financial Services Authority.
The FSA, which oversees mortgage lenders, reported that 340,000 arrears cases had arisen by the end of the period, equal to 2.92 per cent of the nation’s mortgage loan book, up sharply by 0.79 per cent over the same period of 2007. The FSA defines a mortgage in arrears as one which on average is behind on 1.5 per cent of outstanding balances or roughly three months behind in payment.
(From the FT)