It looked at four aspects of the thematic review: analysing the size of the problem, customers’ ability to repay, a review of lenders’ current strategies and a review of the application of the FCA’s rules and principles in respect of post-maturity interest-only mortgages.
Among its key findings were that only 5.9 per cent of properties with residential interest-only mortgages were currently in negative equity.
As of December 2011, there were 2.6m residential interest-only mortgages, representing 29.4 per cent of all residential mortgages by case volume.
According to the report, the availability of residential interest-only mortgages has dropped in the past two years by 2.4 per cent.
The majority of residential interest-only mortgages properties were located in London, the southeast and the southwest, particularly among young professionals in their 20s and 30s.