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NEW figures have revealed homeowners in Oxford owe more than £2bn in residential mortgage debts.

Data from the Council of Mortgage Lenders (CML) offers a stark picture of the debts city and county residents have racked up in pursuit of the dream of home-ownership.

And it illustrates the difficulties many people have even getting on the housing ladder.

Oxford, with £2.43bn of debt, is far and away the area of the county with the most serious mortgage issue.

But the amount of debt held by people in both Abingdon and Banbury was shown to be more than £1bn, while Kidlington, Chipping Norton and Didcot sit on around £500m.

The news has led one expert to raise concerns that if interest rates rise, people with large amounts of debt could struggle to meet their repayments.

Jane King, financial author and senior lecturer in accounting finance and economics at Oxford Brookes University, said as the housing market shows signs of rising, so will the amount of mortgage debt.

She said: “The first thing to consider when assessing whether the lending situation will improve is interest rates.

“Historically, they have been low and the only way for them to go is up. If we do see an increase, some people will certainly struggle to pay their mortgages.

“Secondly, house prices are starting to increase and correspondingly so will the amount needed to borrow.”

The total national mortgage debt, according to the aggregate data published by the CML, is around £891bn, with the total for Oxfordshire reported as £10.5bn.

Bernard Clarke, spokesman for the Council of Mortgage Lenders, said: “In a place like Oxford, we would expect these figures to be higher than other areas.

“We’ve seen the kind of patterns we would expect to see in this most recent data. Next year our predictions show the potential for quite a strong revival in the lending market towards the spring.”

Young mum Freyda Smith, 23, from Wood Farm in Oxford, said house prices are already too high to get on the housing ladder.

She said: “I’m not working at the moment because I’m at home looking after my 19-month-old son.

“We would like to own our home, but it’s not an option at the moment. Even finding money to pay for rent and bills is a struggle.

“It’s definitely something we would like to do one day but things will have to change first.”

Property website Rightmove lists the average cost of a terraced property in Oxford over the last year as £377,178, while semi-detached properties had an average price of £386,162.

Across the county, the average terraced home sells for £268,592.

Semi-detached properties sold for an average of £295,374 with detached ones fetching £481,484.

Rodger Richards, 45, of Banbury Road, Oxford, said as a homeowner with a mortgage, he was worried about interest rates rising.

He said: “With that much debt, we should all be concerned, because if people get into trouble with their mortgages it can have a knock-on effect on the economy. It’s a staggering amount of money.”