Published: 26/03/2008

Our recent survey has revealed that hundreds of thousands of borrowers could be at risk from the current 'credit crunch' and the resultant tightening of credit imposed by many mortgage lenders. We are now seeing hundreds of mortgage deals being withdrawn by lenders as they tighten their reins and concentrate on 'less risky' lending.

Many lenders are now asking for much bigger deposits and the day of the 100% mortgage certainly seems numbered. Indeed some lenders are asking for as much as 50% deposit before they will consider lending and many are reserving their best deals for those lucky souls who can afford to put down at least 25%.

It's our concern that many thousands of borrowers will be left high and dry when their existing fixed rates come to an end and, with estimates that around 1.5 million borrowers will come to the end of their deals in the next 12 months, the effects could be disastrous for those already stretched to the limit.

Our survey results have been widely commented on in the national press with editorial comment in the Daily Mail, Daily Express, Daily Telegraph, The Times and The London Evening Standard amongst others. It's to be hoped that the results will help to add to the pressure on lenders to act responsibly towards their existing borrowers and not just leave them high and dry.

Our advice to anyone coming to the end of a fixed rate deal within the next 6 - 7 months is to act now to secure a new mortgage offer before more deals disappear. Most lenders will keep a mortgage offer open for 6 months meaning that you can hopefully secure a new deal now whilst there are still some reasonable rates available.

Key highlights of the survey are as follows;

• Nearly 35% of borrowers are struggling with mortgage debts of more than three times annual salary.
   
• Nearly 30% of people are unsure whether they would be able to provide evidence of sufficient income to support their mortgage.
   
• 47% of people surveyed are currently on a fixed or discounted rate and of these over 55% come to the end of their existing deal either this year or next.
   
• 17% of respondents have a history of adverse credit (i.e. missed payments, arrears, ccj's etc).
   
• Nearly 30% have mortgage debt of more than 80% of the property's value and nearly 4% have already borrowed more than 100%.
   
• Nearly 10% fear that they are in danger of missing mortgage payments in the next 12 months.
   
• 22% would resort to borrowing on credit cards or personal loans in order to maintain their mortgage payments.

Those most at risk during this period of tightening credit are clearly those who are already overstretched and struggling but unfortunately these are the borrowers who are most likely to find it difficult to obtain mortgages and credit at competitive rates. Next week we will be looking at what we can all be doing to ease the situation and put ourselves in the best possible situation to survive this period of tightening credit.