The repossession plague that devastated the lives of tens of thousands of homeowners in both the housing crash of the 1990s and the global financial crisis ten years ago could return.
Experts from the industry fear that a cocktail of financial pressure will push an increasing number of families to the edge of the abyss, unable to pay their mortgage repayments.
Recent changes in an important advantage for the state are primarily the fault. But higher interest rates and economic paralysis caused by the Brexit – leading to possible job losses – have also brought to light the undesirable phenomenon of the resurrection of mass seizures.
Blight: House seizures may increase if families miss payments after a major benefit of the state has turned into a loan
The number of withdrawals and overdue mortgage loans has steadily declined over the past five years thanks to record low interest rates. But industry insiders warn that the trend will come before the year is over.
An important trigger for the expected increase in arrears is the conversion of state support & # 39; mortgage interest support & # 39; to a loan.
This advantage had previously protected thousands of vulnerable mortgage borrowers against rising backlogs and ultimately losing their home. It was available to people with income-related employment and support allowance – as well as pension credits. It meant that the interest on their loan was paid by the government directly to the lender.
For those who had unemployment benefit, this started after a waiting period of 39 weeks on loans up to £ 200,000. For those with a pension credit, there was no waiting time, but only for loans up to £ 100,000.
If eligible claimants wish to continue receiving aid, the cash is still paid directly to the lender. But since April the benefit has been treated as a loan with a variable interest rate of 1.7 percent. The loan must be repaid when the borrower's property is sold or killed.
The amount of help is based on a & # 39; standard & # 39; rate of mortgage interest, currently set at 2.61 percent, regardless of what rate is levied on a person's mortgage loan. Official figures show that only one in five of the 105,000 persons eligible for mortgage support have taken over the offer.
How an insurance can protect you
Insurance offers a range of options to protect against financial problems, including:
HYPOTHEUS PAYMENT PROTECTION: Includes repayments of loans after the loss of a job, an accident or illness for a maximum of two years. The maximum payment is £ 2,000 per month or 65 percent of your monthly income, whichever is lower. Prices start from £ 10 per month.
INCOMING REPLACEMENT COVER: Pays an income, sometimes up to the age of 60, if a homeowner is unable to work due to illness. For an income of £ 1,500 per month – postponed for three months – monthly premiums will range from £ 20 to £ 25 per month.
CRITICAL SICKNESS DRESS: This turns a flat-rate amount into the diagnosis of a serious illness. This will cost around £ 45 per month to free up a £ 150,000 surrender mortgage, which will be reduced in 25 years.
Jackie Bennett, mortgage expert at UK Finance Industry Association, says: & # 39; There is a disappointing acceptance of support for mortgage interest credits.
Although the Ministry of Work and Pensions suggests that only a few thousand borrowers are at great risk, we believe that anyone who has not taken out the loan is vulnerable. & # 39;
She adds: "Worried, 61,000 people have actively refused to take the loan. Some will have made alternative arrangements, but others will have put their heads in the sand. & # 39;
Bennett says she soon expects that the consequences of this rejection of the loans transferred will be seen in figures with higher payment delays – the forerunner of seizures.
Ray Boulger, from mortgage broker John Charcol, accuses the "awkward implementation & # 39; from the government of the new low-withdrawal scheme.
But Alastair Neame, housing expert from research group the Center for Economics and Business Research, suggests that the fear of an increase in seizures is exaggerated. He points to healthy employment, wage growth and a large number of borrowers in fixed-rate mortgages as a reason not to worry. He adds: & # 39; Most people pay their mortgage first and cut back elsewhere. & # 39;
Neame & # 39; s largest concern is for older borrowers with a fixed income. He says: & # 39; They are the greater risk. But for those who are really in trouble, the loan option is a good idea. & # 39;
Last year, more than 140 families lost their homes every week because they were unable to pay their mortgage repayments. These figures are in comparison with 1991, when ten times that number was reversed every week – 75,500 during the year. In 2009, with the financial crisis at its peak, 940 people lost their properties per week.
Unlike in the nineties, restitution is now the last resort of a lender. Wrestling borrowers can request a payment holiday, ask for a mortgage period or add overdue amounts to the loan.