Millions of Borrowers Struggle with Mortgage Payments

An estimated seven million UK households are struggling to keep up with their rent or mortgage payments, Which? warns, with millions more at risk of tipping into financial difficulty by the end of 2024.

A Which? survey of 4,000 people found 46 per cent of households with mortgages or who are renting have been struggling to keep up with their housing payments – which equates to an estimated seven million households across the UK.

According to Bank of England data, nearly half of all mortgage holders – around 4.5 million households – have already experienced increases to their monthly payments.

Despite the Bank maintaining interest rates last week, this pain is still to come for just under a third of homeowners – 2.1m households – whose fixed-rate deals will finish by the end of 2024. This means millions more households could find themselves struggling to afford their bills.

With pressures continuing to build on household finances, many have had to make financial adjustments to make ends meet. Nearly a third (31 per cent) of mortgage holders have dipped into savings to pay their housing bills – the highest rate amongst all housing tenures.

Around a quarter or more of private (27 per cent) and social renters (25 per cent) have had to use their savings to cover rent. For all these households, dipping into savings means having lesser funds for emergencies and not being able to take full advantage of higher saving rates.

Nearly half of mortgage holders said they are monitoring their finances and budget more and one in five are working more hours to afford their housing bills. One woman from the Midlands on an income of £20,000 – £34,999 said: “All bills have gone up including mortgage (about £140 a month in the last year). My wages have not gone up so I am now having to work overtime to just get by.”

These housing worries are also affecting people’s emotional wellbeing. Half of households with a mortgage and more than half of social renters and private renters are feeling stressed on a daily basis compared to just three in 10 of households who own their homes outright.

Nearly two-thirds of mortgage-holders and renters are worried about their household’s financial security. Over half said they feel like they are not in control of their money.

Rocio Concha, Which? director of policy and advocacy, says: “It’s hugely concerning that seven million households are already struggling to keep up with rent or mortgage payments – with millions more set to remortgage at higher rates  by the end of 2024.

“We’d encourage anyone who’s struggling to seek free debt advice and reach out to their mortgage provider or landlord for help. Banks and mortgage lenders must also ensure they are fully staffed and properly prepared to properly support customers getting in touch to remortgage or because they are struggling to make ends meet.”