PRESS ASSOCIATION -- A rise in mortgage arrears and negative equity in the north of Britain have been blamed on the UK's growing north-south jobs divide.
Mortgage borrowers in the north were 35% more likely to be behind with their payments at the end of March, according to a survey of 1.5 million loans by ratings agency Standard & Poor's (S&P), up from 25% nine months earlier.
Northern homeowners have also seen much steeper rises in negative equity than those in the south and accounted for two-thirds of an overall rise from 3.6% to 5% in the number of loans worth more than the property.
S&P credit analyst Mark Boyce said the sluggish housing market in the north has been partly responsible for the rise in negative equity, but the jobs situation was also a factor, especially in the rising arrears.
"We believe the widening north-south gap in arrears is partly due to the significantly more robust employment trends evident in the south of the UK since the start of the recent downturn in 2007," he said.
Mr Boyce warned that the gap could widen over the next four years as the Government's public sector targeted spending cuts take effect.
"Given the north's public sector jobs bias, we anticipate that unemployment in the regions - and consequently arrears - could escalate. And mortgage risk in the north could diverge even further if the UK's fragile economic recovery falters."