Mortgage News
Long-term arrears a real concern, AMI warns
AMI has warned that the number of people in long-term mortgage arrears will inevitably increase as the forecast rises in unemployment and interest rates come through.
Robert Sinclair, director of AMI, said there was an “undeniable link” between unemployment figures and the number of people long-term arrears.
He said: “With the prospect of rising unemployment looming, there is now real concern that more people will find themselves in difficulty.
“Intermediaries have played a valuable role in providing consumers with the appropriate mortgage, but changes in consumers’ circumstances have clearly proved costly.
“The forbearance shown by lenders is to be commended, but we are still building problems with the levels of market intervention.”
In addition, AMI’s quarterly economic bulletin found that the contraction in money supply at a time of high inflation signals that the current inflationary cycle is supply-led, making it less susceptible to the influence of interest rates.
Your First Home: confidence to build
Sponsored by Halifax Intermediaries
Sinclair added that property investment remains a “complicated balance of risks”.
He said: “The expectation of localised sharp price falls on the back of interest rate rises carries a significant short-term risk, but a squeezed supply means property should remain an attractive long-term investment and provides a strong market underpin.”
In addition, he noted that demand for buy-to-let lending remains particularly strong, offering investors long-term value.
He said: “With lenders now returning to the market, greater competition is likely to further improve landlords’ prospects.”
Read the full AMI report here.