A new survey shows that more than one in three people have serious concerns about their ability to meet their mortgage repayments over the next four months.
These fears are most prevalent in the South East, the area that has led the house price charge in recent months. With speculation over potential interest rate movement, the findings reveal that mortgage repayments continue to be the biggest worry for people in the UK.
In the third of a series of quarterly reports, The CPP Group, a provider of credit and debit card protection in the UK, asked a representative sample of 2,000 people in June 2002 what they most feared not being able to pay in the next four months.
Of those people who fear not being able to repay an outgoing in the next four months, mortgage repayments continue to cause most concern - whilst worries about other household expenditures have mostly dropped since April:
Those aged 35-44 expressed the most concern about the cost of their mortgage – with one in two people (50%) fearing defaulting on their repayment – a rise since April when the figure for this age group was 44%.
Regionally, those people in the South East, where the average house price is £157,414, are increasingly concerned over mortgage repayments – 42% expressed this as a concern in June compared to 30% in April.
Brendan Kiem, from DMA, a company within The CPP Group, says: “The reduction in mortgage costs to their lowest levels in 40 years together with a shortage of available property continues to fuel a renewed surge in house prices – yet while people are over-extending themselves to afford these inflated prices in the short term, they are running the risk of not being able to service such debts in the future. In addition to the more traditional reasons why people could expect to experience financial difficulty, such as divorce, sickness, accident or redundancy, our research clearly shows that a significant proportion of the UK population fears not being able to meet their mortgage repayments should interest rates start to rise. It is therefore imperative that people take a good look at their monthly expenditure and allow for the unexpected.”