Lower interest rates by the Financial Services Authority (FSA) prompted many British homeowners to pay their mortgages on time and for the first time Mortgage payments eased in the first quarter of 2009. The FSA added that compared to the last quarter of 2008 when there were only 68,000 fresh arrear cases, there were only 60,000 new arrear cases in the first three months of this year.
The Government exerted its pressure on the lenders to pass on the interest rate cuts to the borrowers have helped people to make mortgage payments following the aftermath of the credit crunch. However, some British homeowners are still grappling to make payments either because of unemployment or stagnant wages. Further, the rise in arrears is forcing banks to write off several mortgage loans, thus putting them under additional pressure as they struggle with the after effects of last year’s banking crisis. The FSA also said that compared to the previous quarter there were 14, 825 home repossessions, an increase of 13 per cent and 62 per cent more in the same time last year.