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Mortgages at risk.

Mortgages at risk

 The financial regulator has warned that more than three-quarters of a million households are at risk of defaulting on their mortgage payments in the next two years.

In a letter to the House of Commons Treasury committee yesterday, the Financial Conduct Authority said about 200,000 households had fallen behind on home loans by mid-2022.

If 770,000 households defaulted, that would mean about 9 per cent of the mortgages were overdue.

The FCA made the prediction based on a 10 per cent fall in households’ real incomes, as wage growth falls behind inflation, which is at 10.7 per cent.

That will put more people into the FCA’s «at risk» category, defined as anyone who spends more than 30 per cent of their gross household income on mortgage payments.

The FCA’s statement amplifies a warning last month from the Bank of England’s Financial Policy Committee. It said households were being stretched by rising interest rates and soaring inflation, though they were yet to show widespread signs of financial difficulty.

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Comments

  1. Jasper12 January 2023 at 17:44

    This is not good at all. It was to be expected because of everything that is going on nowadays. I think the government needs to step in and do something very soon, otherwise everyone will suffer, banks included.

    ReplyDelete
  2. Alan12 January 2023 at 19:11

    Of course people can't pay their mortgages! It's gotten to the point where you have to pay twice the amount which is insane!

    ReplyDelete

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