52% more homeowners are getting more debt help than five years ago, according to new research by Debt Advisory Centre.
The figures show that in 2008, 25% of people helped by Debt Advisory Centre were homeowners – but this has increased to 38% in 2013.
Increased living costs were given as a major reason for people’s financial difficulties, but it is also suggested that many people simply have mortgages they can’t realistically afford.
In the run up to the economic crisis, mortgage lenders lent money to homeowners without adequately checking whether they could afford the payments in the long run. Others are suffering because falling house prices have left them in ‘negative equity’ – when their home is worth less than the mortgage on the property.
This is especially common amongst homeowners who took on low-deposit mortgages and even 0% deposit mortgages.
And it’s thought that more homeowners could struggle in the future when the Bank of England increases its base rate from the current all-time low of 0.5% – because the base rate directly affects many mortgage rates.
Melanie Taylor of Debt Advisory Centre commented: “Debt problems are always worrying, but they can be all the more serious for homeowners who fear they may lose their home. However, there is nearly always a way to avoid things getting to that point if you act early.
“We offer a wide range of debt solutions for people in all kinds of circumstances, including Debt Management Plans, Individual Voluntary Arrangements (IVAs), Debt Relief Orders and exclusive Scottish solutions such as the Debt Arrangement Scheme and Trust Deeds.
“Getting help early also means interest and charges have had less time to build up, so it really is worth seeking advice as soon as you realise you have a problem.”