Analysis conducted into the nation’s personal finances between 16 to 27 March found 19% of people with mortgages reported a rise in their repayments over this period. Meanwhile, 34% or renters had seen payments increase.
The Office for National Statistics (ONS), which carried out the research, said the reason more mortgage holders had not seen a rise in repayments was down to the fact many were on fixed-rate deals, which provide protection from price and interest rate increases for the duration.
Could rising costs cause people to default on their mortgage?
Those in arrears remained low, at 1%, according to the analysis of how the cost-of-living crisis was impacting Brits.
But there are concerns the problem could get worse if inflation, which his currently at 7%, continues to increase in line with forecasts.
Rosie Hooper, chartered financial planner at Quilter, said: “If finances are stretched even further and this difficulty becomes an impossibility, we could have a significant problem on our hands with thousands of people defaulting on their payments and potentially losing their homes.”
What to do if your mortgage becomes unmanageable?
Rosie offered advice to anyone concerned they may not be able to keep up with repayments.
“If you feel that your mortgage is becoming unmanageable then it’s important to talk to your lender as soon as possible,” she said.
“Burying your head in the sand is the worst course of action although often the seemingly the easiest in the short-term.
“There are a variety of ways lenders can help and they will work with their customers to create payment plans that may be able to help ease the financial burden.”
How will cost of living crisis impact first-time buyers?
With the cost of rent also rising for many people, there are also concerns this will create further challenges for first-time buyers saving to get onto the property ladder
The ONS analysis found 43% of respondents would not be able to save money in the next 12 months. Rosie said this may mean any house purchasing plans would need to be put on hold until once again deposit pots can start to be funded.
“This may further take the wind out of the sails of the housing market as fewer potential buyers reduces demand and house prices with it” she explained.
“We are in for a tough few months or even years but it is always best to seek help if you are struggling with your finances to avoid spiralling into debt.”
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