HOMEOWNERS in Johannesburg continue to struggle to meet mortgage repayments because of the prevailing credit crunch. The FNB residential property barometer, a survey of the property market based on data from local estate agents, indicates that in the fourth quarter of last year most homes were put up for sale by homeowners trying to downscale due to financial pressure.

The survey revealed that a total of 26% of homeowners across all income brackets were opting to sell because mortgage repayments were becoming too difficult to meet.

The recent interest-rate cut is good news and will provide at least some relief to over-burdened homeowners.

However, there are ways of easing the stress of bond repayments. Mark Beckett, CEO of Bond Choice, says: “Approach your bank as soon as you realise you are in financial difficulty. The banks want to assist clients and consider it a last resort to repossess homes. “Running away from the responsibility only compounds the problem in the future.” He says that extending the home- loan period from 20 to 25 or even 30 years will help to reduce the monthly instalment amount.

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Data from the Council of Mortgage Lenders has revealed there were an astonishing 18,900 cases, during the first half of 2008, where lenders had to repossess borrower’s properties, compared with 12,800 during the first six months of 2007.

The CML claims the data shows no surprises and maintains its forecast of 45,000 total possessions and 170,000 mortgages in arrears of more than three months by the end of the year, although it says these numbers remain extremely small when seen in the context of the 11.74 million mortgages in the UK.

The above figures relate to first mortgages, not to other consumer loans secured on people’s homes. Michael Coogan, director-general of the CML, says: “The number of people facing difficulty needs to be kept in perspective. The good news is that most people are coping well and continuing to pay their mortgages in full.”