Is The UK in Debt Denial Over Mortgage Repayments?
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Is The UK in Debt Denial Over Mortgage Repayments?

Clock  3 minute read

Carl Shave Carl Shave | May 17, 2014

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The Financial Ombudsman has reported a record level of complaints relating to mortgages in the past 12 months. Since May 2013, 13,659 complaints have been filed with the Ombudsman, 814 more than the 12,845 complaints made between the same period in 2012-2013.

From bad credit mortgages, to mortgages which look straightforward on paper, the complaints have been flying in thick and fast, with 40% pertaining to home-owners unable to meet their scheduled repayments. This troubling figure looks alarmingly like the beginning of serious issues with mortgage repayments amongst British home-owners.

It’s not all doom and gloom

Yet contrasting figures released by the Council of Mortgage Lenders (CML), paint a different picture. In fact, the CML’s statistics show that just 138,200 UK mortgages are in arrears of more than 2.5% of the outstanding balance. This is the lowest rate that CML have reported since the recession hit in 2008.

So why are these two sets of figures telling two very different stories? Is the UK in deep debt denial and struggling with a silent repayment problem as the Financial Ombudsman’s statistics seem to suggest? Or are we actually getting better at keeping a handle on our mortgage repayments as the UK slowly climbs out of the economic crisis?

Greater financial awareness

It seems likely that both sets of data are factually correct and are not mutually exclusive. A higher incidence of complaints does not necessarily mean a higher level of failed mortgage repayments.

Instead, it looks like we are a nation who are becoming  increasingly savvy about who to contact and who to consult about financial issues. If the credit crunch has taught us anything, it’s to approach potential monetary issues head-on, giving them no time to spiral and worsen.

A greater understanding of the Financial Ombudsman (and related bodies), who they are and what they do, may well have lead to a greater number of complaints being made in the past 12 months. Further details from the Ombudsman seem to back this up: Only one third of complaints were upheld in this period.

Cause to celebrate?

So if we’re not in deep debt denial and instead are finding bad credit mortgage (and regular mortgage) repayments increasingly achievable – while creditors become more familiar with the correct courses of action for when things get difficult – what’s the problem? Well, for once it may just be that this is a “good news” mortgage story!

Keen to learn more about the current financial landscape for mortgage seekers? Interested in how bad credit mortgages work? Talk to our team on freephone 0800 9777840 today.

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