Over 30% of Brits Struggling to Meet Mortgage or Rental Obligations
The cost of living crisis is taking its toll on millions of UK citizens, with as many as one-third thought to be battling to pay their monthly rent or mortgage payments, with 3% falling behind with mortgage repayments.
Analysis performed by the Office of National Statistics between the 16th and 27th of March showed a 19% increase in the number of homeowners who had seen their mortgage repayment costs rise, whereas 34% of renters reported that their monthly rent had increased. The reason for the lower-than-expected number of people experiencing mortgage increases is due to the large number of homeowners being on fixed-rate mortgage deals and therefore protected from the increases in interest rates.
Homeowners showing to have defaulted on their payments remain low at 1%, but many are expecting that figure to rise if the cost of living and inflation, already at 7%, continue to increase.
Rosie Hooper, chartered financial planner at Quilter, said: “If finances are stretched even further and this difficulty becomes an impossibility, we could have a significant problem on our hands with thousands of people defaulting on their payments and potentially losing their homes.”
For anyone having serious concerns over whether they will be able to make their obligated repayments, Rosie had the following advice:
“If you feel that your mortgage is becoming unmanageable, then it’s important to talk to your lender as soon as possible,” she said.
“Burying your head in the sand is the worst course of action, although often seemingly the easiest in the short term.”
“There are a variety of ways lenders can help, and they will work with their customers to create payment plans that may be able to help ease the financial burden.”
With the cost of rental accommodation also on the rise, there is a concern that this will affect the first-time-buyer market, with many tenants only being able to meet their monthly rental payments, significantly reducing the chances of being able to save for a deposit to purchase a property.
Figures from the Office of National Statistics found that 43% of participants in the survey said that they are unlikely to be able to save any cash in the next year due to increased outgoings.
“This may further take the wind out of the sails of the housing market as fewer potential buyers reduce demand and house prices,” she explained.
“We are in for a tough few months or even years, but it is always best to seek help if you are struggling with your finances to avoid spiralling into debt.”