Northerners struggling the most with mortgage debt problems

New figures released by the ratings agency Standard Poor’s have shown that there is an increasing north-south divide amongst homeowners when it comes to mortgage debt problems and arrears.

After analysing a total of 1.5 million mortgages held in the first quarter of 2011, the agency published research showing that homeowners in the north of England are as much as 35 per cent more likely to fall into arrears on mortgage payments than those living in the south. This figure stood at just 25 per cent in the first quarter of 2010.

Mortgage arrears fell in the south over the last 12 months, but they increased considerably in other areas of the country. Whilst London saw a drop in the number of loans in arrears from 3.2 per cent to 3 per cent, the number rose from 3.2 per cent to 3.4 per cent in Scotland and from 3.9 per cent to 4.1 per cent in Yorkshire and the Humber.

Standard Poor’s mortgage experts posited that the difference between mortgage arrears is because of “more robust employment trends” in the south of the country since the time when the economic downturn began.

The agency also warned that the spending cuts planned by the government could make this situation worse, particularly as the north has more of a public sector jobs bias. If large numbers of these jobs are cut and unemployment rises, homeowners could be facing escalating debt problems and mortgage arrears.

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