Rising property mortgage rates lead to worry among UK homeowners as they also fear that their property may be repossessed, a research said. Half of the UK population is anxious about property mortgage rates and 26% of people with mortgages fear having their home repossessed.
The research indicates that the gap is widening between older, more financially secure home owners and those who are struggling, namely those who are aged 30 to 49 who bought their homes recently and younger people who can’t get on the property ladder.
The Which? Quarterly Consumer Report says that many people in the 30 to 49 age group are so called mortgage prisoners, trapped in their current mortgage deal, unable to switch when rates increase. This group has the greatest housing related costs, spending on average £186 a week, compared with the national average of £135.
Home ownership has become unaffordable for first-time buyers who are apparently taking almost 9 years to accumulate large deposits for the purpose. Around 54% of the people are worried whether they would make it to the property ladder.
Lenders have also increased mortgage arrangement fees, which have risen by around 60% in the past eighteen months to an average of £1,472 in August 2012.
Which? is calling for the Treasury to put tougher obligations on banks taking part in the Funding for Lending Scheme. The consumer organisations wants the government to ensure lenders that have been given access to cheap finance pass this on through lower borrowing costs to help all borrowers, not just those with significant equity. Which? also wants the government to publish its expectations for the scheme, and what safeguards are put in place to ensure that banks pass on cheap funding to consumers.