Middle-class fear they won't be able to pay the mortgage

TWO out of five middle-class professionals fear they will struggle to pay their mortgage next year, a poll reveals today.

The poll also showed that high earners are the most worried that they will default on their mortgage payments.

The findings highlight how the economic downturn has hit the City, retailers and manufacturing but is now predicted increasingly to affect other professions such as law and accountancy, marketing and advertising agencies and public relations companies.

The YouGov survey for a report by the Conservatives on the housing market found that 42 per cent of middle-class professionals were concerned about not being able to pay their mortgage next year, compared with 46 per cent of blue collar workers. Of the higher earners, 15 per cent said they were "very worried" about not being able to meet their repayments, compared with 12 per cent for other social groups.

Shadow housing minister Grant Shapps stressed that the recession was having an impact across all sections of society. He said: "Householders up and down the country and in every kind of housing are now concerned, as never before, about their ability to maintain a roof over their heads. While Gordon Brown would like us to believe that the Government has fixed the roof when the sun was shining, it's now becoming clear that for many hard-working families concern about keeping their home is greater than at any time before."

The Council of Mortgage Lenders is predicting that repossessions will double to 75,000 next year and yesterday the Chartered Institute of Personnel and Development warned that more than 3,300 jobs are set to be lost a day in the first three months of next year.

It is forecasting that unemployment will rise by at least 600,000 next year, with half of this increase happening before Easter. Ministers are working with lenders on schemes to help people keep their home if they suffer a short-term loss of work, although this is unlikely to be of benefit to many people in London because of limits on the size of mortgages.

Consumer affairs minister Gareth Thomas urged individuals facing financial difficulties to act quickly. He said: "It is imperative that when people are struggling with debt they seek assistance as soon as possible. There are a wide range of organisations who provide expert advice and can really make a difference."

He said the number of people contacting the National Debtline soared by 40 per cent in November to 23,000 compared with the same month last year.

Meanwhile, Britain's householders repaid £5.7 billion of home loans in the three months to September as they sought to reduce their debt, according to new figures.

The International Monetary Fund has raised doubts over the value of Gordon Brown's 2.5 per cent cut in VAT. It said: "It is questionable whether decreases in the VAT of just a few percentage points are salient enough to lead consumers to shift the timing of their purchases."