UK Subprime Mortgage Arrears Rising

Posted by Rob

August 12, 2008

House Prices According to research carried out by Moody’s, the proportion of UK subprime mortgages falling into arrears has jumped to 10 per cent.

The research highlighted the difficulty facing UK home owners, as the economy slows down and more and more home owners struggle to repay mortgage loans.

[Moody's] found that the number of mortgages in arrears has jumped from 7.3 per cent in the second quarter of 2007 to 10.2 per cent in the second quarter this year. - FT.com

With house prices falling, court action looks more likely for those falling into arrears. With mortgage lenders keen to sell on property before depreciation increases on the property value. UK house prices have fallen about 8.5 per cent so far in 2008 and mortgage lenders such as HBOS are predicting that house prices will fall 20 per cent by the end of 2009.

With mortgage security on the minds of many, particularly in the UK and US, there is a marked increase in individuals seeking a term insurance quote online. In some cases this is to cover mortgage repayments, and in others, this can include life insurance or critical illness cover.

The UK economy has been under pressure for a lengthy period of time, with some shouting “recession” and others adamant that the UK are going to turn the ship around. Various UK jobs sectors have been struggling including the construction sector - with the price of houses falling the necessity for new housing is becoming less popular.

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