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UK mortgage arrears up by 31% in 2008

The Financial Services Authority (FSA) has today revealed that the number of mortgage accounts in arrears increased by 31% during 2008. By the end of the year there were a staggering 377,000 mortgage holders in arrears of 1.5% or more of the value of their loan. This roughly equates to around three months mortgage arrears and is set to grow as the recession deepens and the housing market fails to respond to government attention.

The FSA also confirmed that mortgages agreements in arrears account for around 3.4% of all mortgages in the UK with loans of £40 billion at stake. Even though many UK banks have already written off substantial losses in the mortgage market it would appear that the longer the UK recession continues the more write-offs we will see in the future. As the UK taxpayer is effectively supporting the banking industry at the moment it would appear that UK taxpayers are in line for another significant hit in the future.

In another bitter blow for the UK housing sector it was also revealed that the rate of house price falls has been speeding up over the last few months. It has been very difficult to find any good news in the housing sector over the last few weeks even though there have been a number of false dawns over the last 12 months.

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