Page last updated at 08:35 GMT, Tuesday, 20 May 2008 09:35 UK

Thousands given mortgage warning

Home being repossessed
It has been predicted that repossessions will rise

Homeowners in Scotland could be living one pay packet away from a housing crisis, Shelter Scotland has warned.

Figures from the charity showed almost a third of homeowners with a mortgage have no savings or investments.

The charity said this meant if there was a long-term drop in household income they ran the risk of being unable to meet mortgage payments.

The statistics come amid concerns about the impact of the credit turbulence on the property market.

The figures quoted by Shelter showed that 265,000 of the estimated 2.3 million households in Scotland had a mortgage but no savings or investments.

The statistics were gathered in the Scottish Household Survey 2005-06 and are also based on further information supplied by the Scottish Government.

Too few homeowners realise how fragile their finances are until they hit an unexpected crisis, which prevents them from paying their mortgage and other bills
Archie Stoddart

The charity said it had seen a sharp rise in the number of visits to the repossessions advice pages on its website. Throughout 2007, they were viewed almost 35,000 times.

Shelter Scotland director, Archie Stoddart, said: "These stark new figures show how thousands of people in Scotland could be at risk of finding themselves in a housing crisis, and at worst, homeless.

"Too few homeowners realise how fragile their finances are until they hit an unexpected crisis, which prevents them from paying their mortgage and other bills.

"We aren't saying this will happen to everyone, but with the potential for unsettling times ahead we must ensure we have a better safety net in place for homeowners who experience difficulties with their mortgage payments."

Mr Stoddart said the most far-reaching solution would be to promote alternatives to homeownership.

He said this would ensure that those who could not actually afford a home did not feel they had no other option but to overstretch their finances to get a house.

Shelter is calling for significant improvements to be made to the current safety net to support people with difficulty in meeting mortgage repayments, and other measures including better recording of information on repossessions in Scotland.

In response to the concerns over the future of the housing market, the charity has organised a conference, The Scottish Housing Bubble, on Thursday, where key commentators on Scottish housing and the economy will examine the prospects for the Scottish housing market.

There are currently no figures available for house repossessions in Scotland.

However, most recent UK figures - up until February 2007 - showed that repossessions had risen by 20%, with predictions that they would rise to 45,000.

A Scottish Government spokesman said: "We are funding a range of measures to assist individuals and families that are in danger of losing their home.

"Our Mortgage to Rent scheme, unique to Scotland and unparalleled in England, has seen around 9.4m to help families stay in their homes by offering them the flexibility to change the tenure of their home from ownership to a tenancy in the social rented sector."

He added: "The Scottish Government will invest a record 1.5bn on affordable housing over the next three years."

Kennedy Foster, policy consultant with the Council of Mortgage Lenders in Scotland, said Scotland accounted for about 10% of the UK mortgage market.

However, he added that anecdotal feedback had shown that the housing market in Scotland was performing better than the rest of the UK.

Scottish house prices rise again
15 May 08 |  Scotland
Surveyors warn of home sales fall
19 May 08 |  Business
Up to 60,000 'face repossession'
04 Apr 08 |  UK Politics
Debt time bomb over repossessions
30 Mar 08 |  Business
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02 Apr 08 |  Business
Thousands face home repossession
31 Jan 08 |  Scotland

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