Rise in homeowners paying off mortgage arrears
Homeowners behind on their mortgage payments are now much more likely to pay off their arrears than they were two years ago
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Your support makes all the difference.Research by law firm Irwin Mitchell shows that of those who had defaulted on their mortgage and received a home visit between April and June 2011, 51.5% paid off all or some of their arrears. This was a 7% increase over the same period in 2010 and 43% higher from two years previously when just over a third made a contribution.
The study was carried out by Irwin Mitchell’s debt collection subsidiary Ascent which analysed data from 12,500 UK households which missed monthly mortgage payments and received a mortgage arrears home visit on behalf of their lender.
Those who have fallen behind recently are also paying back larger chunks of their defaulted debt. Of the 2,476 who received a visit or telephone call from a counsellor during April, May and June 2011, 37% paid an amount back equivalent to more than one month’s mortgage, twice as high as the proportion who did so two years previously.
“Although our research points to a large number of people who are struggling with their mortgage, there are some encouraging signs in terms of the effectiveness of home visits and the amount of money people are able to pay in order to settle their arrears," said Niall Gilhooley from Ascent. "Household incomes are under significant pressure from all sides but it appears people are determined to do all they can to work with their lender in order to safeguard their home.”
He added that the signs are that this upward trend with repayments will continue for at least the next three months.
The survey also showed that the number of cases where a mortgage arrears home visit resulted in no financial arrangement being reached has fallen by 50% over the last year.
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