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Almost half of the owners of the UK's 2.9 million interest-only mortgages have no plans to pay off their loan.

According to research from LV=, four in ten of the interest-only borrowers are relying on the value of their property increasing as a means of paying off their mortgage when it comes to remortgage.

LV= says only a fifth of people plan to use other investments, not linked to their mortgage, to pay off their mortgage.

Of course, with house prices continuing to fall by as much as 15% according to some sources, this puts those on interest-only deals in a lot more difficult position.

And problem could be limited to a smaller group of people – nine out of ten of those who have no plans took up their mortgage since 2003.

Mike Rogers, group chief executive of LV=, says: "A previously booming property market led many people to bank on being able sell their home, use the proceeds to pay off the mortgage, and still have enough left to buy another home.

“However, this strategy may have been overturned by current and predicted future falls in property prices. These people should therefore seriously consider investing as much as they can now, and regularly, to help pay off the mortgage capital at the end of the term."

To Keep up with news and comments on the current adverse credit market please visit the Adverse Mortgage Blog.