Many lenders and debt advice providers started last year worrying about the level of mortgage defaults.
Schemes to help struggling borrowers such as Homeowner Mortgage Support were untested, nobody knew what would happen to unemployment and lenders were not used to dealing with large numbers of struggling customers.
Looking back, things were not as bad as was feared and most borrowers managed to maintain repayments. So have we cracked it?
We see thousands of home owners with debt problems each year. The average client has around £40,000 of unsecured debt on top of their mortgage. They call us when they can’t get further credit.
Last year saw a big jump in the number of consumers seeking help. A lot of them would have remortgaged but finding this option unavailable they were forced to seek debt advice.
For lenders this was good news. By prioritising mortgages and adjusting unsecured debt payments we could balance budgets and cut the risk of mortgage arrears.
But I believe another group is having problems below the radar – those who were running deficit household budgets last year and are now running out of options.
They have used the extra money they have due to lower mortgage repayments to run up more debt.
This year of relative calm gives lenders the chance to identify these borrowers and offer resolutions. It won’t be easy but the lenders that are successful will reap rewards.