CAB enquiries jump 51%

10 October 2008

Figures for July to September 2008 show a 51% increase in new mortgage and secured loan enquiries and a 10% increase in fuel debts compared to the same period last year.

CAB also saw 35% more mortgage and secured loan arrears problems over the last 12 months, compared with the previous 12 months, with 77,324 new enquiries since October 2007.

The charity welcomed a reduction in the number of credit, store and charge card debts, and unsecured personal loan debts being seen by the bureaux, down 4% year on year.

A breakdown of clients with mortgage and secured debt arrears found that over half, 51% were aged 35-49. Half were households with dependent children and one in five were single parents with dependent children.

David Harker, chief executive of CAB, says: "While we are pleased to see the number of consumer credit problems going down, the increase in the number of enquiries about basic essentials is worrying and these figures show how the current economic situation is hitting vulnerable and low income households the hardest.

"To prevent this situation worsening, it is vital that mortgage lenders and fuel companies do everything in their power to help people in arrears to come to a workable solution over repayment arrangements, rather than piling on extra charges. All creditors should treat borrowers in arrears fairly and sympathetically, negotiate with borrowers in trouble and only use court action for mortgage arrears as a last resort.

"If you are falling behind with payments on a mortgage or secured loan you should speak to your lender straight away. Lenders should negotiate with borrowers, but if you are having problems, make sure you seek free, confidential, independent advice without delay.

"Receiving court papers doesn't mean that you are automatically going to lose your home. Getting advice, even at a late stage, can help the majority of people come to a workable agreement with their mortgage lender and can make all the difference between saving or losing their home."

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