With a significant number of borrowers coming off fixed rates in the next few months, concerns have been raised about borrower’ ability to adapt to a higher rate environment.
Cameron called for lenders to remember their ‘social responsibility’ and help borrowers adjust to their new rates and avoid a wave of repossessions.
Speaking before a meeting with the Council of Mortgage Lenders (CML), Cameron said: “With house repossessions already rising rapidly, this could be the final straw for many borrowers across the country. We need to take stock of this situation, and together take steps to minimise the impact these higher mortgage bills might have. After all, it’s in no one’s interests if home owners can’t keep up with their repayments. Let’s not forget, banks lose out too if mortgages are not repaid.”
The CML said it was never in the best interests of lenders to chase repossessions and that its members did everything possible to help borrowers adjust.
However, it blamed the Conservatives for scaling back income support for mortgage interest in 1995, removing the state safety net.
Michael Coogan, director-general of the CML, said: “The Conservatives are rightly concerned to address this issue. The main missing link at present is an appropriate benefits system.”
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