Whisper it quietly, but there are growing fears that the British property market may be reaching saturation point.
This week, the Bank of England (BOE) finally decided to intervene in the face of soaring property values, by discarding its flagship Funding for Lending Scheme (FLS). This initiative was originally designed to help make mortgage lending more accessible to a wider social demographic, but the rate of expansion within the real estate market has forced the BOE to reconsider its position. More specifically, it is attempting to safeguard the British economy against the threat of a sudden and unexpected downturn in the market.
Coping with Defaults on your Mortgage: 3 Steps to Stay Afloat
The issue of under-employment is also complicating the market, as it was revealed this month that more than 50% of British graduates currently work in jobs that do not require a degree. This is creating a generation of adults who are failing to fulfil their earning potential, which may in turn trigger a rise in the number of mortgage defaults and repossessions. This could signal the beginning of the end for the real estate bubble, but even if you begin to struggle with your repayments there are steps that you can take to survive. Consider the following: -
Gain a Comprehensive Understanding of your precise Circumstances
If you have defaulted on your mortgage repayments, the first step is to understand why. If this is the result of a temporary job loss or a short-term drop in income, you can often overcome this issue by communicating with your lenders and sharing your problems with them. As a result, your lenders may be able to amend the terms of your agreement or even allow you to take a brief payment holiday, until you are able to continue earning. If your issues are more deep-rooted, however, you may need to take more drastic measures while still maintaining open lines of communication with lenders.
Prioritize your Individual Debts
As a secured loan, the consequences of falling behind on your mortgage repayments can be significant if they are not dealt with directly. One of your first steps should be to evaluate and prioritize your individual debts, paying particular attention to those that are secured and involve a considerable amount of collateral. Additionally, there may also be a need to make radical changes to your lifestyle, whether this involves selling a non-essential vehicle or cutting back on monthly expenditure. By adopting a committed and frugal approach, it is possible to adapt to an unfortunate loss of earnings and disposable income.
Consider Selling your Home and Optimizing Value
In instances where you can no longer manage your monthly mortgage repayments, you will need to take strong and difficult decisions. In the most extreme cases, you may even need to consider selling your property below its market value, in order to optimize its resale value and recoup the majority of your initial investment. The only issue with this is that the process of selling a house can be particularly time-consuming, so it may be prudent to contact a specialist service provider like the House Bureau in order to execute a quick and professional transaction. In the quest to stay afloat after falling behind with your mortgage repayments, this may be the only way of moving forward positively.