Taylor Scott International News
Some 60% of mortgage holders in the UK anticipate that they will be in the same financial position or better in three years' time even though the majority expect interest rates to rise. Around half expect their finances to be broadly unchanged, with more than 10% predicting their financial position will improve, according to new data published by the Council of Mortgage Lenders (CML). The figures, published in conjunction with YouGov, shows that almost one third expect their finances to worsen as rates rise with a fifth say they are currently experiencing some financial difficulty, but fewer than half this amount believe themselves to be in danger of missing a mortgage payment. Across the market, however, mortgage arrears are continuing to decline, and CML data shows there are currently only 1.18% of loans with arrears amounting to 2.5% of the outstanding balance. The data also sheds light on likely triggers of mortgage payment difficulties, many of which are not simply related to the loan commitment itself. Some 61% said that a higher cost of living is the most common factor affecting future mortgage affordability, with 41% citing minimal savings, 36% low or falling income , 30% other debts and 17% ill health. The survey identifies that borrowers have a range of coping strategies or actions they are prepared to take to ensure that their mortgage remains affordable. Top of the list is cutting back on non-essentials cited by almost 40%, but other options include cancelling major spending plans, remortgaging to a cheaper deal or working more hours. ‘Those who expect their situation to get worse and to be in some degree of difficulty over the next few years are willing to take more action and consider a broader range of actions. They are generally open to trying a combination of coping strategies, rather than just opt for one,’ said a CML spokesman. ‘Although this might be a hypothetical situation, it shows households apparently have a well-grounded understanding of the plausibility of their coping strategies and are being realistic about their prospects,’ he added. Taylor Scott International
Taylor Scott International, Taylor Scott
