CCCS highlights number of ‘mortgage prisoners’ in West Midlands
More than 40 per cent of homeowners taking out property loans in the West Midlands since 2005 are ‘mortgage prisoners’, the Consumer Credit Counselling Service (CCCS) has noted.
The charity cited Financial Services Authority (FSA) statistics – placing the figure between 41 per cent and 45 per cent - in a new report investigating how mortgage payments are taking up significant proportions of people’s incomes in the region.
A mortgage prisoner is defined by the FSA as someone who would struggle to move home because their property debt is at least 85 per cent of its value. Some people may have been mis-sold mortgages to end up in this situation.
Delroy Corinaldi, director of external affairs at CCCS, said: “There are a very large number of financially vulnerable households in the West Midlands – and it is vital that they know where to turn if they fall into difficulty.”
His organisation revealed that it has seen an increase of 135 per cent – from 2005 to 2010 – in the number of people seeking help because they are having difficulty meeting their mortgage payments.
Changes to rules affecting mortgage prisoners were announced at the end of last year, according to Mortgage Strategy, with the FSA telling lenders that it will relax affordability guidelines to allow people to escape their financial quandary.
The statement appeared in the final Mortgage Market Review consultation paper, describing the amendments as “transitional arrangements”.
