Families who face mortgage misery

Apr 14 2008 By Gurdip Thandi

HOUSEHOLDERS in Staffordshire are in danger of losing their homes as they plunge deeper into debt, according to new figures today.

Tamworth Conservatives say thousands of families in the town are at risk of defaulting on mortgage payments,leading to repossession.

Analysis by The Spectator magazine, using data from credit agencies, shows that 8,533 households across Tamworth have a "sub-prime loan exposure", and may be now struggling with debt.

Christopher Pincher, spokesman for Tamworth Conservatives, called on mortgage lenders to contact home owners three to six months before the end of their fixed rate mortgage period, offering free financial advice and not imposing sudden rises in repayments.

Tories are also calling for stamp duty to be abolished for first time buyers of homes valued at up to £250,000.

Mr. Pincher said: "Thousands of families across Tamworth 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."

Last year 231 repossession orders were issued by Stafford County Court.

The Bank of England has 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 across the country 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.