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356,000 additional mortgage borrowers could face repayment difficulties by mid-2024

A further 356,000 mortgage borrowers could face payment difficulties by the end of June 2024, on top of those already in arrears, according to City regulator.

This was down from a previous estimate made last September which suggested a further 570,000 mortgage borrowers could be in difficulty by the end of June 2024. Office of Financial Control (FCA), said.

The FCA has defined mortgage borrowers as being in a financial position where more than 30% of their gross household income goes towards mortgage payments and they are not currently experiencing a payment shortfall.

The estimate has been revised downwards due to a change in market expectations of the Bank of England’s base rate.

The previous analysis was based on market expectations in September 2022, when the Bank Rate peaked at around 5.5%, as opposed to the peak of around 4.5% in February expectations used to calculate the latest estimate.



If you’re struggling to pay off your mortgage or fear you might, you don’t have to go it alone

Sheldon Mills, FCA

In this group, those who end up on a fixed-rate deal could pay an average of £340 a month, according to the regulator.

As of June 2022, about 200,000 mortgage borrowers were in arrears.

The FCA has published its latest assessment, confirming revised guidance which sets out ways in which mortgage lenders can help customers who are worried or already struggling with their mortgage payments due to the rising cost of living.

The regulator expects firms to support people in financial difficulty.

The guide covers options such as extending the term of their mortgage or reducing their monthly payments for a temporary period.

Making changes, even temporary ones, could result in higher monthly payments in the future or higher repayments overall. Mortgage borrowers should carefully consider any steps they take, and customers who can keep up with their payments should continue to do so, the FCA said.

Sheldon Mills, executive director of consumer affairs and competition at the FCA, said: “Our research shows that most people are doing well to pay off their mortgage, but some may struggle.

“If you’re struggling to pay your mortgage or fear you might, you don’t have to go it alone.

“Your lender has a number of tools available to help. Get in touch as soon as you have a problem, don’t wait until you’re about to miss a payment before doing so. Simply talking to them about your options will not affect your credit score.”

FCA research has shown that borrowers aged 18 to 34 are more likely to experience financial problems than the rest of the working-age population.

Those who live in London and Southeastwhere house prices are often higher than the UK average, are also particularly likely to be stretched.

A foreclosure does not necessarily mean borrowers will miss payments, as some will be able to use savings, cut expenses or increase income to help meet their mortgage obligations.

In addition to contacting their lender for support, worried borrowers can also visit MoneyHelper for tips on how to pay their bills, budgeting tools and find free debt help.

The FCA, major lenders and consumer representatives attended the Mortgage Summit in December.

The FCA has since said it continues to work with lenders to help borrowers get the support they need, including timely communication.

According to the regulator, lenders proactively contacted customers a total of 16.5 million times across multiple channels to offer support last year.

They expect this to grow to 20.5 million contacts within the next year.

Last year, lenders supported more than two million customers to manage their finances, including through budgeting tools, access to debt advice and individual mortgage forbearance.

The FCA said it would continue to monitor the mortgage market and how firms support their customers.

https://www.independent.co.uk/money/356-000-extra-mortgage-borrowers-could-face-payment-difficulties-by-mid2024-b2297817.html

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