Mortgage Crisis Deepens: One in Four Face Missing Payments This Year
As interest rates continue to soar, an estimated 1.6 million households in the UK are facing spiralling debts, with a quarter of mortgage holders at risk of missing their payments by the end of this year. This crisis has led to a significant increase in pleas for financial assistance, with charities reporting a tripling of requests for help in the last three years.
The mortgage crisis is deepening, with many homeowners struggling to make ends meet.
The situation is particularly dire for those coming to the end of their fixed-rate deals, who will face an average hike of £1,800 annually on their repayments as they move on to higher interest rates. This has led to a surge in repossession claims, with 5,182 claims made in England and Wales in the first quarter of this year, a 40% increase in just 18 months.
Repossession claims have surged, with many homeowners struggling to keep up with their mortgage payments.
The Bank of England’s latest figures show that the value of outstanding mortgage balances with arrears now stands at £20.3 billion, a 50.3% increase from 2022. Analysts warn that the situation will only worsen unless interest rates come down soon.
Mortgage arrears have skyrocketed, with many homeowners struggling to make ends meet.
The government’s Mortgage Charter, introduced last year, prevents banks from progressing repossession proceedings following initial non-payment, but the scheme is up for review in July. In the meantime, mortgage holders are being forced to make tough decisions, such as cutting back on expenses, seeking mortgage renegotiations, or even considering selling their homes to avoid repossession.
The Mortgage Charter has provided some relief, but more needs to be done to address the crisis.
While interest rates are predicted to improve later this year, the situation remains dire for many homeowners. As the cost of living crisis continues to bite, it’s clear that more needs to be done to support those struggling to make ends meet.
The cost of living crisis is exacerbating the mortgage crisis, with many homeowners struggling to make ends meet.
