Some 770,000 households are either at risk of a mortgage shortfall over the next two years or are already behind with payments, according to the Financial Conduct Authority (FCA).
And the FCA has estimated, based on its data, that up to an additional 570,000 mortgage borrowers may be at risk of a payment shortfall over the next two years.
The figures were included in correspondence published by the Treasury Committee on Wednesday, as part of the FCA’s response to questions posed during a recent accountability hearing.
The letter said that at the end of June 2022, there were close to 200,000 regulated mortgages in payment shortfall.
The letter added the number is “sensitive to changes in interest rates”, factoring in market expectations in September 2022.
The FCA said those at risk of a payment shortfall are defined as having more than 30% of their gross household income going towards their mortgage payments.
The letter, signed by FCA chief executive Nikhil Rathi and dated December 14 2022, said: “This does not necessarily mean that those at risk will miss a mortgage payment because some people will be able to reduce their spending or make use of savings to help them meet their mortgage commitments.”
The regulator said the analysis is being updated to take account of changes in market interest rate expectations.
Anyone who is concerned about their finances should contact their lender as soon as possible to discuss the options available to help— UK Finance
The Office for National Statistics (ONS) recently said more than 1.4 million households are facing the prospect of interest rate rises when they renew their fixed-rate mortgages this year.
A spokesman for trade association UK Finance said earlier this week: “Lenders stand ready to help customers who might be struggling with their mortgage payments, with a range of tailored support available.
“Anyone who is concerned about their finances should contact their lender as soon as possible to discuss the options available to help.”
