The results showed the majority of mortgagors seem comfortable with there debts, with only around 10 per cent of borrowers having less than 20 per cent of equity in their home.
However their findings also revealed that 7.7 per cent of mortgage owners reported experiencing re-payment difficulties, slightly up on last years results, but well down on figures seen in the early 1990s.
The report remains consistent with evidence from the Council of Mortgage Lenders which showed a small increase in mortgages arrears and possessions since the first half of 2004, prompting fears that UK borrowers are overburdening themselves
Households who experienced most difficulty in repaying their mortgage debt tended to have more debt than those who did not have problems. They also tended to have lower incomes according to the Bank of England report. The most common reasons given for difficulties in meeting payments was a lack of cash flow or over spending rather than other shock factors such as unemployment, divorce or illness.
Brian Murphy, head of lending at the Mortgage Advice Bureau, commented: “Repossession figures compared to the early 90s are relatively low. Lenders borrowing criteria has to be sensible and while there is a demand for homeownership you will find people are prepared to give up part of their disposable income to achieve that.”
