One million face mortgage risk, says FSA

The Financial Services Authority (FSA) has said that as many as a million homeowners could find their homes at risk because of the credit crunch.

In its Financial Risk Outlook for 2008, the FSA warned that problems with affordability and the lack of favourable deals for the 1.4 million householders coming off fixed-rate mortgage deals this year could bring problems for hundreds of thousands, with the three biggest risk factors - deposits of less than ten per cent, mortgages lasting over 25 years and salary multiples of over 3.5 - affecting 150,000 people whom it regards as particularly vulnerable.

Another 890,000 could have substantial difficulties with their mortgages this year, the FSA warned.

The current economic climate may persuade some that self build is a better option at present.

Since the credit crunch began, the housing market has slowed notably, with today's Nationwide figures showing a further 0.1 per cent fall in house prices this month being the latest evidence of this trend.


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