“With no indication of when rates might come down, people risk finding themselves trapped in long-term problem debt as that credit ultimately becomes unsustainable.”
– Richard Lane, chief client officer at StepChange Debt Charity
UK Finance data out today shows homeowner mortgages in arrears rose by 7% in the final quarter of 2023 compared to the previous quarter.
This comes amid new YouGov polling for StepChange Debt Charity which reveals that 44% of mortgage holders are finding it difficult to keep up with bills and credit commitments, up from 36% in September 2023.
The survey found that more than one third (35%) of mortgage holders are showing at least one sign of financial difficulty.
One in five (21%) have used savings in the last 12 months to ensure they can make mortgage payments and almost one in four (23%) mortgage holders have used credit in the last year to ensure they can make mortgage payments.
Richard Lane, chief client officer at StepChange Debt Charity, said: “We know from our own clients that people tend to prioritise their mortgage and fall behind in other areas when they’re struggling to make ends meet, so it’s especially worrying to see mortgage arrears creeping up across the UK.
“Higher mortgage payments and wider cost of living pressures have eroded people’s ability to cope financially, so it’s not surprising that more are turning to credit or savings to cover essential housing costs. However, with no indication of when rates might come down, people risk finding themselves trapped in long-term problem debt as that credit ultimately becomes unsustainable.
“We would urge the government to consider how it can step in to help those in financial difficulty now and in the near future. All government cost of living support is due to end in March, removing an essential safety net for low-income households. The mortgage charter was introduced last year in response to high rates putting pressure on households – updating and extending these measures could be beneficial in supporting struggling mortgagers.”