Homeowners at more risk now than in 90s downturn

27 2008
A leading insurance company has today warned that homeowners could be at greater risk now than during the previous economic recession of 1992.

A survey by AXA has shown that the financial commitment of mortgage repayments is putting huge pressure on families during the current slowdown in the property market.

AXA claims that the root of the problem is lenders who offered mortgages worth up to seven times higher than annual salaries during the 'boom' years that followed the crisis almost 16 years ago.

Director of protection marketing Iain Mallon said: "The economic growth experienced in the UK in the past 15 years has encouraged a short-term view of finances with a buy today and pay tomorrow attitude.

"It is surprising that so few people have plans in place to provide for themselves and their families given how rapidly things can change."

The study showed that nine out of ten single earner families currently hold mortgages yet only 16 per cent insure their income to make sure they meet mortgage repayments.

The possibility of being forced into arrears is becoming more significant, highlighting how beneficial renting could be in terms of managing costs and minimising debt.
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