Homeowners struggling to meet mortgage repayments

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Homeowners struggling to meet mortgage repayments

Thu 7th Jun 2007

Increasing numbers of people investing in bricks and mortar for the first time are struggling to meet their mortgage repayment costs, new research has found.

Figures compiled by Reuters show that over two million young homebuyers predict they will find it hard to meet their mortgage repayments in future in the wake of rising interest rates.

It believes that if the Bank of England's monetary policy committee (MPC) decides to increase rates by a further quarter point, some 500,000 extra homeowners will struggle to meet repayments.

Eamonn Rice, chief executive of mform.co.uk, suggests that a number of first-time buyers have used most of their savings or taken out 100 per cent mortgages in order to get on to the property ladder, which may contribute to their difficulties.

Homeowners are set to enjoy some respite from interest rate rises this month, with a poll suggesting the majority of economists believe that the MPC will hold interest rates at its monthly meeting.

However, a number of commentators expect interest rates to rise by at least a quarter point before the end of the year.

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