Leading Field Agency Argues That Mortgage Arrears Being Paid Off More Quickly

National law firm, Irwin Mitchell’s field agency business, Ascent, has questioned the latest findings by the Association of Arrears Mediators (AAM) which suggests a ‘deepening arrears’ problem in the UK where more homeowners are struggling to meet their monthly mortgage obligations. 

The AAM, which claims to represent companies such as DMS and NCI  made the claim after its members reported a 10% fall in the number of pre-litigation visits made during the last quarter and a 20% rise in pre-eviction visits.

Niall Gilhooley from Ascent explained: “I certainly disagree with the AAM’s findings on a number of levels.

“Our most recent Domestic Arrears Report painted a very different picture to theirs as it showed that UK homeowners who have fallen behind with their mortgage payments are now significantly more likely to pay off some or all of their arrears than two years ago.

“I don’t doubt that a large number of people are struggling with their mortgage, but our data points to an improving picture. Household incomes are under significant strain from all sides, but it appears people are determined to do all they can to work with their lender to safeguard their home.”

Irwin Mitchell’s Domestic Arrears Report revealed that out of those who had defaulted on their mortgage and received a home visit during Q2 of 2011, over half paid off all or some of their arrears. This represents a 7% increase compared to the same quarter in 2010 and a significant 43% rise from two years ago when just over a third made a contribution.

Ascent, which is not an AAM member, also found that out of those who have fallen behind recently, more people are paying back larger chunks of their defaulted debt. Out of those who received a visit or telephone call from a counsellor during Q2 of 2011, 37% paid an amount back equivalent to more than one month’s mortgage - twice as high as the proportion who did so two years ago. In 2009, 0.9% cleared their arrears completely whilst most recently this figure reached 2.7%. 

Niall added: “I would also question the AAM’s conclusion that a fall in the number of visits carried out its members automatically reveals a sign of hardening debt.

“Not only does our data point to homeowners paying more back; the number of visits that we are conducting is rising.

“This also leads me to question the AAM’s claim to represent 90% or more of the market. Ascent is now conducting over 2,000 visits each month which easily makes us one of the leaders in mortgage arrears field visits. There’s no doubt our position will strengthen further in the year ahead.”