Mortgage-related debt management problems in the UK look set to become more serious than the crisis that occurred in 1992, it has been claimed.
According to a report from the Axa insurance firm, there are more homeowners with borrowing arrangements that leave them vulnerable to repossession and arrears than was the case 16 years ago.
Tens of thousands of properties were repossessed in 1992 but more people are now in jeopardy because they have taken on a home loan that amounts to four, five or even six times their annual earnings, Axa insists.
Axa is recommending income protection insurance and Iain Mallon, from the company’s marketing team, said: “The economic growth experienced in the UK in the past 15 years has encouraged a short-term view of finances with a buy today and pay tomorrow attitude.”
Earlier this week, Paul Holmes, chief executive at Firstrung, described the house price boom of recent years as being a “disaster” for anyone not yet on the property ladder.
Written by Lucy Matthews