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Young borrowers falling into homeloan arrears

Around 770,000 borrowers have missed one or more mortgage payments in the last 12 months, says Citizens Advice.

Research from the charity shows that younger people are more likely to have missed a mortgage payment, with 13 per cent of 21-24 year-olds surveyed said they had missed one or more payments in the last year. It says some people who are new to homeownership may be getting straight into difficulties.

The findings come after a report by Standard & Poor’s last month predicted that lenders’ losses are likely to grow over the next few months because of increasing arrears.

The CA survey also found that some people do not understand what secured lending is and that missing payments on these loans could lead to them losing their home. It expresses concerns about the way that secured loans are marketed in newspaper, radio and TV ads by celebrities.

Citizens Advice chief executive David Harker says: “These figures do not surprise us as we see many people with mortgage and rent arrears. We are very concerned about the numbers of people who are missing payments.

“Missing payments on mortgages or secured loans could lead to arrears and possibly repossession. There is a clear need for more information and advice about the consequences of taking on financial comm- itments, particularly for younger adults.”

John Charcol spokesman Drew Wotherspoon says: “With the continual increase in house prices, people often need to stretch themselves to achieve the required mortgage amount, but overstretching beyond their means is a mistake.

“There are a number of solutions available to those who struggle to get a mortgage via the traditional route and potential borrowers should always seek professional advice to find out the best deal.”

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