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| Mortgage arrears up 31% in 2008 | |
| (about 2 hours later) | |
| The number of mortgage accounts in arrears has shot up by 31% in the past year, according to figures from the Financial Services Authority (FSA). | |
| At the end of 2008 there were 377,000 accounts in arrears by 1.5% or more of their loan balance, roughly equivalent to arrears of at least three months. | |
| It means borrowers in trouble currently hold 3.4% of all mortgage loans, with their loans worth just over £40bn. | |
| Other government figures show house price falls are speeding up. | |
| The City regulator has been publishing its detailed figures on the mortgage industry since the middle of last year. | |
| They clearly illustrate how the recession, growing unemployment, and falling incomes, have made it harder for some people to repay the home loans they took out before the house price boom of the past decade reached a climax two years ago. | |
| "With borrowers increasingly struggling to clear their arrears, the total number of loan accounts in arrears has been steadily increasing since early 2007," said the FSA. | |
| Falling prices | |
| The fall in UK house prices gathered pace in January, according to the government's own house price index. | The fall in UK house prices gathered pace in January, according to the government's own house price index. |
| The index is published by the Department for Communities and Local Government (DCLG) and is based on home sales completed in January. | |
| It said that prices were 11.5% lower than in January 2008, a faster rate of decline than the 10.2% annual fall seen in December. | |
| This took the price of the average UK property down to £195,724, a fall of £26,034 in the past year. | This took the price of the average UK property down to £195,724, a fall of £26,034 in the past year. |
| Prices have been falling fastest in Northern Ireland, down 14.3%, and are still highest in London, where the average home costs £301,383. | Prices have been falling fastest in Northern Ireland, down 14.3%, and are still highest in London, where the average home costs £301,383. |
| The slowest decline was in Scotland, where prices fell 6.3%. | |
| 'Similar trend' | 'Similar trend' |
| The DCLG figures suggest that the fall in house prices, which started in the autumn of 2007, has not been quite as severe as indicated by surveys from the Nationwide and the Halifax. | |
| These surveys, based on mortgage approvals, have indicated that prices in the year to February have fallen by nearly 18%. | These surveys, based on mortgage approvals, have indicated that prices in the year to February have fallen by nearly 18%. |
| However, the DCLG said they were all pointing in the same direction. | However, the DCLG said they were all pointing in the same direction. |
| "The DCLG index is currently showing a similar trend in annual house price rates to other indices available from commercial sources," it said. | "The DCLG index is currently showing a similar trend in annual house price rates to other indices available from commercial sources," it said. |
| The DCLG survey also indicates that the dearth of mortgage finance for first-time buyers is having a distinct effect in driving down prices. | The DCLG survey also indicates that the dearth of mortgage finance for first-time buyers is having a distinct effect in driving down prices. |
| The price of homes bought by first-timers fell by 15.4% in the year to January, compared with a drop of just 10% experienced by homes being bought by former owner-occupiers. | The price of homes bought by first-timers fell by 15.4% in the year to January, compared with a drop of just 10% experienced by homes being bought by former owner-occupiers. |