The number of homes given up in England each year between 2010 and 2012 due to mortgage difficulties fell by over half (54 per cent) compared to 2005 to 2009, according to new analysis from housing investment and shared equity mortgage provider, Castle Trust.
Analysis of the latest ONS English Housing Survey by Castle Trust shows that during the period 2010-2012, fewer than 12,000 homes a year were given up due to mortgage payment difficulties. This is significantly lower than 2005-2009 where there were 26,000 homes given up each year.
However Castle Trust has cautioned homeowners to be wary of a rise in inflation and an increase in the UK base rate, which has been held at 0.5 per cent for four years. Indeed recent ONS research shows just how significant a proportion (34 per cent) of a household’s monthly expenditure goes on mortgage payments.
Castle Trust, which provides a safer way to buy a home and to invest in property, believes households can search for new and innovative lending products to protect themselves from any potential rises in mortgage costs.
Sean Oldfield, chief executive officer, Castle Trust said: “The number of homes being given up has fallen but the risk to homeowners of rising mortgage rates is still a major issue which shared equity can play a major role in reducing, including the risk of going into arrears, by controlling monthly mortgage commitments.
“The Partnership Mortgage helps lenders and borrowers overcome this issue so many more good quality customers can secure the mortgage they want while HouSAs enable investors to gain exposure to the national housing market directly or through an ISA or a SIPP.”
Partnership Mortgages are for 20 per cent of the value of an owner occupied home alongside a repayment mortgage of up to 60 per cent from a traditional lender and a deposit or equity of at least 20 per cent. There are no monthly commitments on the Partnership Mortgage and Castle Trust shares 40 per cent of any profit made by the homeowner when they sell or come to the end of the mortgage term. The company also shares 20 per cent of any loss made on a home bought with a Partnership Mortgage.
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