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Mortgage debt in Northern Ireland 'has risen to £44m'

By Margaret Ccanning

Published 10/06/2015

Around two in five of those surveyed said that their property was in negative equity
Around two in five of those surveyed said that their property was in negative equity

Mortgage shortfall debt in Northern Ireland has increased by nearly 25% to reach £44m, a debt service has claimed.

Debt Action NI said it was "concerned" at increased levels of debt resulting from people still owing money to a bank or building society after their house had been sold or repossessed.

The service, which is part of Advice NI, said its clients had an average debt of £100,000 - and that it was concerned the figure could get worse if interest rates are put up.

It said that nearly 70% of clients surveyed in an online poll feared they would not be able to keep up mortgage repayments if rates went up from their historic low of 0.5%, where they have been for six years. The Bank of England is expected to put up the interest rate by next summer.

Fiona Magee, Advice NI deputy chief executive, said: "This is a ticking economic and social time bomb which we all need to be aware of."

After the property bubble burst, many people who bought at the peak of the market between 2006 and 2008 saw the value of their homes tumble. Prices fell up to 60% from the market's high point - and have since begun to rise, but only gradually.

Around two in five of those surveyed said that their property was in negative equity - worth less than the amount of money they borrowed to pay for it.

Areas such as Omagh and Dungannon, where prices have been slowest to recover, have been hit hardest by negative equity. Ms Magee said the service could help people in negative equity or those left with a shortfall after their home was sold or repossessed.

"Our service is free and our advisers are experienced with negotiating with lenders on a daily basis."

She added: "There are a number of companies out there who are charging for this type of advice and in some cases clients are paying significant upfront costs, with some being quoted fees of over £4,000. In difficult times, people should be aware that there is help at hand, which will not make an already difficult financial situation worse."

Belfast Telegraph

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