As recession looms and Gordon Brown continues to put his faith in the “free market”, hundreds of thousands of people are at risk of losing their homes.
Shocking new figures from the government’s own research reveal that almost one in ten people in England are spending more than three quarters of their income on mortgages.
More than 19,000 households, with a disposable income of less than £1,000 a month, are having to spend all of it – or in some cases more – to pay off their mortgages.
Nearly 40,000 are forking out more than 75 percent of their income on mortgage payments. More than one in five – 146,520 low income households – pay out more than 50 percent of their income to stay in their homes.
The news came after figures from the council for mortgage lenders revealed that the number of homes repossessed jumped by 21 percent last year.
A new report by the Citizens Advice Bureau, shows how the majority of people coming into their offices seeking mortgage advice have been rejected by the high street banks and mortgage lenders.
They are then forced to take loans from subprime lenders at much higher rates of interest.
In south London a woman with mortgage arrears had resorted to a sale and rent‑back company.
While her property was worth £350,000, she was given just £200,000.
She also received a six‑month £750 per month tenancy agreement. The landlord then wanted to put it up to £1,300 per month. Shortly afterwards the woman was back in court facing possession for rent arrears.