Calls for help with mortgage arrears up 35%

A leading UK debt charity is reporting a 35 per cent increase in people turning for help with mortgage arrears.

National Debtline is now calling on the government to provide extra support for struggling households, as the effects of rising prices, interest rate rises from last year and the tightening of lending amid the credit crunch conspire to hit Britons.

Joanna Elson, chief executive of the Money Advice Trust, which runs National Debtline, said: "The increase in [calls for help with mortgage arrears] suggests that homeowners are feeling the effects of the credit crunch and of the three interest rate rises during last year."

She added the effects of the credit crunch were particularly hitting the 1.4 million households coming off fixed-rate mortgage deals this year and finding repayments rising as they struggle to find remortgage deals.

"It is imperative during these difficult times that the government, the banking industry and the advice sector work in partnership together to minimise the number of homeowners getting into serious difficulty and keep people in their own homes wherever possible," she said.

Ms Elson is today meeting with a trio of ministers - Yvette Cooper, chief secretary to the Treasury, Kitty Ussher, economic secretary to the Treasury, and housing minister Caroline Flint - to discuss the crisis.

She continues, "We are extremely pleased to be involved in today's meeting where we will put forward various recommendations.

"These include, a review of the current qualifying conditions for state supported mortgage payments, the feasibility of creating a national mortgage rescue scheme, the implementation of the early protocol on repossession action as drafted by the Civil Justice Council and an examination of the possession action taken by subprime lenders who are not presently regulated by the Financial Services Authority (FSA)."

Daniel Barnes