Saturday, 5 April 2008

Worrying numbers of home owners in West Lindsey are facing debt problems

Effect of credit crunch and rising mortgage interest rates

Giles McNeill, Conservative Candidate for Nettleham Ward, today expressed his concern at new figures which warn that 5 million families across Britain could be at risk of defaulting on mortgage payments and losing their home.

The analysis, conducted by The Spectator magazine using data from credit agencies, shows that 6,378 households in Gainsborough Constituency have a ‘sub-prime loan exposure’, and may be now struggling with debt.

This comes as the latest official Government figures show that 19,015 homes across the Midlands were hit with repossession orders last year, with 447 orders being issued by Lincoln County Court. The Bank of England has also warned that banks and building societies are planning to cut back their lending further in coming months.

The crisis in the credit market is reducing the availability of cheap loans and mortgages, hitting people on the housing ladder and those not yet on it. This year, 1.4 million mortgages will come to the end of their fixed rate periods. As interest rates are higher now than they were two years ago, this could add £200 to the average monthly mortgage bill, placing yet more pressure on severely stretched family budgets.

Conservatives are calling on mortgage lenders to do more to help these families by:
· Contacting home owners 3-6 months before the end of their fixed rate mortgage period,

· Offering free financial advice, and

· Not imposing sudden hikes in repayments.
First time buyers are suffering from the credit crunch too, as mortgage lenders are demanding larger deposits. In response, Conservatives are calling for stamp duty to be abolished by the Government for first time buyers, for homes up to £250,000.

Giles McNeill said:
“This week has brought more worrying evidence that under Gordon Brown, our economy is built on debt. Labour’s record is one of economic incompetence.
“Thousands of families across West Lindsey are now exposed to the possibility of losing their home. With many households facing soaring bills as their fixed rates come to an end, mortgage lenders should do more to help home owners with the soaring cost of living and help reduce the hardship under Gordon Brown’s Government.”