More than a quarter of Britain’s mortgage holders fear that their home could be repossessed, according to a study conducted by consumer website Which?.
Moreover, 50 percent of the population are also worried about the rising interest rates. While the Bank of England’s (BoE) base rate remained at the record low of 0.5 percent for over three years, the Standard Variable Rates (SVR) of 1.6 million borrowers have increased since August 2011.
As such, these borrowers need to fork out £400 million (S$784.72 million) each year as additional interest payments. The cost of mortgage arrangement fees has also increased in the past 18 months, making it increasingly expensive for borrowers to switch to a different lender.
Data for the Funding for Lending Scheme (FLS) revealed that only £500 million (S$980.9 million) worth of mortgages were granted by the 35 lenders that signed up for the scheme.
But it remains “unclear whether this cheap finance is being passed on to the people who need it the most”, said Richard Lloyd, Executive Director at Which?.
“There must be more transparency about how this subsidy is being used and clearer rules to ensure more borrowers can benefit, not just those with significant equity in their homes.”
Romesh Navaratnarajah, Senior Editor of PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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