Oil slump sees mortgage arrears triple in Aberdeen – Moody’s

Moody'sMortgage arrears in Aberdeen are running at double the UK average rate and triple what they were in 2012, according to credit rating agency Moody’s.

The firm said plummeting oil prices and contagion from rising unemployment in Aberdeenshire has spread to the housing market.

The latest figures from Moody’s Investors Service reveal that 5.5 per cent of property lending in the Granite City was currently in default.

The UK average ranges between 1.0 per cent and 2.5 per cent.

It also warned arrears could rise further in Aberdeenshire, as volatility in the UK’s oil industry increases unemployment and dampens house sales.

Christophe Larpin, a vice president and senior analyst at Moody’s, said: Aberdeenshire’s situation is symptomatic of a two-speed economy: The region’s dependency on the oil industry has led to accelerated unemployment since mid-2015, while the rate has fallen in the rest of the UK overall. The housing market has suffered, with higher arrears.”

Moody’s report, entitled “Diversification Protects RMBS, Despite Deterioration of Mortgages in UK and Dutch Energy Producing Regions,” is available on www.moodys.com.

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