Young Homeowners Have Lower Debt Arrears

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The Consumer Credit Counselling Service has said that homeowners in their 20’s manage their household budgets better thanks to cheap mortgage deals.

The charity advised that the number of homeowners in their twenties who were seeking advice had almost halved in the past two years partly due to record low interest rate payments which made managing budgets easier. 816 people were helped in 2011, down from 1344 in 2009.

It said low interest rates had meant the typical monthly mortgage payments for those in their 20s had gone down from £543.92 in 2009 to £471.61 in 2011.

 

The CCCS said that twentysomething homeowners had seen a “dramatic improvement” in their household budgets, which had gone from a deficit of £15.02 in 2009 to a surplus of £63.42 on average by 2011, despite high living costs generally.

But the charity expected many people to “buckle under the pressure” if interest rates rose, as they continue to deal with tough employment conditions. A recent spate of lenders have been raising their mortgage rates, with further increases expected to follow.

Delroy Corinaldi, CCCS director of external affairs, said:

“While many young adults are struggling to get on the property ladder, the outlook is more positive for those that are already on it.

“Nevertheless, this is not a time for complacency as there are multiple pressures attacking their ability to pay their mortgage and many will buckle under the pressure of rising interest rates.”

The charity said fewer homeowners in this age group were generally seeking its help, down from 4,489 in 2009 to 3,008 last year.

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