More people could fall behind with their mortgage payments
The slowing housing market could spell disaster for many homeowners already struggling to pay their bills and higher interest rates, according to the Council of Mortgage Lenders (CML)
The CML recently predicted that house prices would fall next year and that there would be a 50 per cent hike in repossessions.
Homeowners who have been dependent on releasing equity in their home, or selling their property to fund their spending will also obviously come under pressure if this happens.
David Stubbs, senior economist at the Royal Institution of Chartered Surveyors, says: “People have been able to offload their property into a strong market if they fall behind on their payments. As the market slows into 2008, we expect the numbers falling behind to increase.”
Consumers who hope to rely on securing additional credit to bridge the gap in their financial difficulties could have no joy because lenders are now tightening their criteria, making it harder to get loans and credit cards.
Neil Munroe, from credit-reference agency Equifax, says: “Credit rejections are increasing, and are hitting credit cards and personal loans as well as mortgages. In the midst of tightening lending criteria, it is likely that things will get bumpy for consumers.” You have been warned!