Mortgage company predicts customer struggles

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The company that took over assets from bailed-out lenders Bradford & Bingley and Northern Rock is braced for an increase in customers struggling to cope with their mortgages.

UK Asset Resolution (UKAR) said the uncertain economic outlook, the rising cost of living and falling house prices could lead to more customers experiencing difficulties and it is planning to step up measures to help.

UKAR chief executive Richard Banks said: “We expect these factors may lead to more of our customers experiencing difficulties in meeting their mortgage payments and we are planning to increase our programme of proactive contact to help those customers who may be at risk.”

B&B repaid a further £700m in Government loans during the first half of 2012, reducing the total amount owed to the Government to £26.2bn.

It paid £251m to Government in the form of interest, fees and corporation tax.

Northern Rock Asset Management repaid a further £88m in Government loans, reducing the total amount owed to the Government down to £19.6bn.

It paid £140m to Government in the form of interest, fees and corporation tax.

UKAR said about 10 per cent of its customers are finding it difficult to meet mortgage repayments.

“We are in choppy seas and the economy is difficult,” said Mr Banks.

“We aren’t seeing fuel prices reducing and house price inflation is non-existent.

“These are difficult economic circumstances for a lot of customers.”

He added that the longer interest rates stay low, the more it helps customers as they have less to pay each month.