Many homeowners 'risk defaulting'
1st April 2010
A pay cut of £300 per month would leave one in four people struggling to pay their mortgage, research has revealed.
Credit reference agency Callcredit Information Group said 26% of homeowners would be in danger of defaulting on their property if their monthly income fell by this level.
A poll carried out by YouGov on behalf of the company also revealed that almost one in ten people had deliberately inflated their income when applying for credit, while 6% had tried to take on more debt despite knowing they would struggle with repayments.
The research also found that people between the ages of 35 and 44, typically families with young children, were particularly likely to have applied for credit knowing they might not be able to repay it. More than one in ten in this social group had overstated their income when applying for credit and 7% had stopped repaying their credit card in full.
Graham Lund, managing director of Callcredit Information Group, said: "These statistics are extremely alarming. A significant proportion of people aged 35 to 44, many of who may have families to support, are living on a financial precipice where just one negative event, such as a reduction in paid overtime or an unexpected expense, could have disastrous financial consequences."
Copyright © Press Association 2010.
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