Mortgage payment shortfalls hit hundreds of thousands

More than 770,000 households are at risk of falling behind with their mortgages, the financial regulator reveals.

fall through mortgages

Around 200,000 people are behind with their mortgage payments, and a further 570,000 are at risk, the financial regulator warns.

As the cost of living crisis bites and inflation rises, many households are finding their income doesn’t go far enough.

Now, the Financial Conduct Authority (FCA) has confirmed that hundreds of thousands are struggling with more than a third of their money going towards a mortgage.

Nikhil Rathi, CEO, Financial Conduct Authority

In a letter to MPs, Nikhil Rathi, FCA CEO, said up to 200,000 homeowners were in payment shortfall at the end of June last year, which is 2.4% of the total.

Up to an additional 570,000 may be at risk of payment shortfall in the next two years.”

He went on to say: “We estimated based on our date that up to an additional 570,000 may be at risk of payment shortfall in the next two years.

“We assumed that all households would experience a 10% fall in their incomes over this period,” he told the Treasury select committee.

Risky loans

This news from the FCA comes in the same week that the Bank of England warned lenders it would be watching closely for any risky buy-to-let loans. The Bank is concerned that landlords may default on mortgages they can’t afford.

Last week, the Bank revealed that mortgage approvals fell to the lowest level since the first Covid lockdown was lifted in 2020.

The number of new mortgages for house purchases decreased to 46,100 in November from 57,900 in October, the lowest level since June 2020 (40,500).

What's your opinion?

Back to top button