A third of borrowers are worried they will fail to make mortgage repayments in the next year because the of pressures created by the cost-of-living crisis.
As many as 56% have revealed the soaring costs are also affecting their mental health, according to the survey commissioned by global tech firm Dye & Durham and conducted by independent market research firm Danebury Research.
It comes just days after mortgage lenders were issued with official guidance on how they must support borrowers who were struggling to make repayments.
The Financial Conduct Authority (FCA) said 356,000 mortgage holders could face payment difficulties by the end of June 2024, and it wanted to ensure there was support in place to help them manage payments.
This latest research, which surveyed 2,000 homeowners, goes further in highlighting how rising bills, grocery costs and mortgage rates are impacting people’s day-to-day finances and wellbeing.
Those in the 18 to 24 age range appear to most vulnerable to this risk, with 42% (compared to 30% across all age groups) revealing they were worried they may fail to make mortgage repayments in the next 12 months.
But across all age groups, more than a third (36%) said they could only afford to continue paying their mortgage for two months if a job loss affected the main breadwinner, meaning repossessions could become a rising risk for the UK’s property market.
Martha Vallance, chief operating officer for Dye & Durham, said: “The effects of high interest rates, energy bills and the increased cost of living overall cannot be underestimated.
“Our survey data shows people in the UK are extremely concerned about both their short- and long-term future and have reduced spending, raided savings and are delaying major purchases.”
Cost-cutting measures
As many as 43% of respondents revealed they had sold personal items to better manage household budgets.
More than half (55%) had made personal sacrifices so their family and children were not impacted – for example by eating less, or not buying clothing or shoes for themselves.
Already to date, 25% of respondents had been forced to delve into savings to put cash towards day-to-day expenses such as food or heating.
One fifth (21%) of those in London said they may need to remortgage to an interest-only mortgage to temporarily reduce monthly payments should interest rates continue to increase long term
To help manage monthly outgoings, three in five (60%) homeowners have cut back on takeaways or meals out – including two thirds (66%) of those aged 55-64. More than half (52%) say they have reduced clothes shopping.
