One in four mortgage holders have used credit to afford mortgage payments in the last 12 months

^{8 February 2024}

UK Finance data out today shows homeowner mortgages in arrears rose by 7% in the final quarter of 2023 compared to the previous quarter. This comes amid new YouGov polling for StepChange Debt Charity revealing a worrying picture for mortgage holder finances.

• 44% of mortgage holders are finding it difficult to keep up with bills and credit commitments. This is up from 36% in September 2023
• More than one third (35%) of mortgage holders are showing at least one sign of financial difficulty*
• One in five (21%) have used savings in the last 12 months to ensure they can make mortgage payments
• Almost one in four (23%) mortgage holders have used credit in the last 12 months to ensure they can make mortgage payments

With interest rates remaining high, and there still being many households yet to secure a new mortgage deal since rates started rising, StepChange says the government must be ready to intervene with further support for struggling borrowers.

Richard Lane, Chief Client Officer at StepChange Debt Charity, said:

“We know from our own clients that people tend to prioritise their mortgage and fall behind in other areas when they’re struggling to make ends meet, so it’s especially worrying to see mortgage arrears creeping up across the UK.

“Higher mortgage payments and wider cost of living pressures have eroded people’s ability to cope financially, so it’s not surprising that more are turning to credit or savings to cover essential housing costs. However, with no indication of when rates might come down, people risk finding themselves trapped in long-term problem debt as that credit ultimately becomes unsustainable.

“We would urge the government to consider how it can step in to help those in financial difficulty now and in the near future. All government cost of living support is due to end in March, removing an essential safety net for low-income households. The mortgage charter was introduced last year in response to high rates putting pressure on households – updating and extending these measures could be beneficial in supporting struggling mortgagers.

"Charities like StepChange offer free and impartial advice if you’re experiencing problem debt. Our new homeowner hub provides a one-stop-shop for mortgage-based advice and support.”

Notes to Editors

1. All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 2,096 adults. Fieldwork was undertaken between 13th - 15th January 2024.The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+)
2. September polling was undertaken between 1st - 3rd September 2023. Total sample size was 1,986 adults. The survey was carried out online. The figures have been weighted and are representative of all UK adults (aged 18+)
3. Signs of financial difficulty include making just the minimum repayments on debts; using overdraft in each of the last three months, using credit, loans or an overdraft to make it through to payday; falling behind on essential household bills (e.g. rent, mortgage, energy bills, council tax etc.); using credit to keep up with existing credit commitments; getting hit by late payment or default charges; missing a regular monthly payment on at least one debt; and using credit to pay essential household bills (e.g. rent, mortgage, energy bills, council tax etc). Severe problem debt means selecting three or more of these options
4. UK Finance’s mortgage arrears and possessions stats can be found here