A further three million people were unsure if the homeowner or the government was responsible for keeping up mortgage payments if the homeowner became unemployed or could not work.
The Conservative government abolished state aid in 1995 and it has not been restored by the Labour party since it came to power. With rising unemployment figures, Ian Noble, head of strategic partnerships at Lincoln Financial Group, said consumers needed to be aware of the impact of becoming unemployed, with regards to mortgage payments. He said: “Millions of people are living with a false sense of security believing that the government will bail them out if they cannot earn.
“At Lincoln we are strongly advising people to ensure they have plans in place to protect their mortgage repayments. Orders for mortgage repossessions made in the first quarter of 2006 in England and Wales rose 57 per cent on the year, with 21,997 court orders made during the three months to March 2006. With house prices at such high levels, and interest rates potentially set to rise, people must make it their responsibility to ensure their families and homes are protected.”
Harry Katz, principal at Norwest Consultants, said financial advisers needed to ensure they were making borrowers aware of the financial stipulations a mortgage places them under. He said: “What do financial advisers tell borrowers when they take out the loan? Surely any responsible intermediary spells out their responsibility to meet their monetary obligations. This was the rule under the MCCB regulation. It’s just basic good practice.”
