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Rising number of people struggle with rent or mortgage payments

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Written by: Shekina Tuahene
25/10/2022
The proportion of adults in Britain finding it hard to afford their rent or mortgage payments has risen sharply in the period between June and September 2022.

A third (30%) of people paying rent or a mortgage were struggling to keep up, according to data collated by the Office for National Statistics (ONS). This is compared to 26% of people reporting difficulties between March and June. 

Broken down by tenancy, 39% of renters reported finding payments unaffordable compared to 23% of those with a mortgage. 

Rising energy bills are also adding pressure to household finances as overall, 45% of adults said they were struggling to pay for these utilities in the four months to September compared to 40% in March to June. 

Renters are finding it harder, with 60% having difficulties with the affordability of energy bills while 23% of those with a mortgage said the same. 

Despite this, people seem to be keeping up with payments for the most part as just 3% of adults reported being behind on their rent or mortgage payments and 5% were not keeping up with energy bills. This was broadly flat on proportions of 2% and 4% respectively in the previous polled period. 

Downsizing becoming a ‘real consideration’

Rio Stedford, financial planning expert at Quilter, said interest rates have been rising to try and combat rampant inflation.

Stedford said: “But due to fuel being thrown on the fire during the mini Budget, interest rates are projected to rise even further later this year. Lenders have been quick to up their mortgage interest rates on all products, which means that homeowners with fixed rates coming to an end within the next year or two, will likely see their bills rise considerably when they come to the end of their deal. 

“The option of moving to a smaller home to achieve lower monthly mortgage payments is starting to become a real consideration for some homeowners. However, before putting a house on the market, it is worth considering that if a flood of properties all hit the market at the same time, this could end up driving house prices down.” 

Ethnic minorities and those with disabilities find it harder 

Disabled adults were more likely than non-disabled adults to report difficulties with keeping up with energy bills, rent or mortgage payments. 

The ONS found 55% of adults with disabilities said it was hard to afford energy bills, while 36% found rent and mortgage payments difficult. This was compared to 40% and 27% of non-disabled adults respectively. 

Further, 4% of disabled adults said they were behind on their rent or mortgage payments compared to 2% of non-disabled adults. 

Non-white adults are also feeling the strain more, with 28% of white adults finding their rent or mortgage unaffordable while 39% of those from mixed or multiple ethnic groups were struggling. 

Almost half (46%) of adults with Asian heritage were finding it hard to keep up with rent or mortgage payments, and black Britons were finding it most difficult with 52% reporting struggles. 

Those from ethnic minority backgrounds are also more likely to be behind with rent or mortgage payments, with the highest share of those falling behind being black Britons and those from mixed or multiple ethnic groups at 9% apiece. 

Some 8% of adults with Asian heritage had fallen behind, and 2% of white adults were failing to keep up with their rent or mortgage. 

Londoners finding it harder to pay

Adults in the youngest and oldest age groups were least likely to report being in difficulty or being behind on rent or mortgage payments, which the ONS said was possibly due to younger adults not yet being responsible for such payments while older people are likely to own their homes outright. 

Those living in London had a higher likelihood of finding rent or mortgage payments hard, with 37% of adults in the capital saying so. People in the North West and London were also likelier to be behind on housing costs with 5% shares respectively. 

People on lower incomes also reported more difficulties with keeping up with bills. 

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “Those on lower incomes are being crushed between rising energy bills and housing costs, including those on prepayment meters, renters, people with disabilities, black or black British people and Asian or Asian British people. And the pressure is only going to get worse.   

“Renters are also facing some impossible challenges. They’re finding it harder to pay their energy bills and cover their housing costs than those with mortgages.”   

She added: “Renters are also more exposed to rises in living costs. The rapidly falling number of properties available to rent, coupled with escalating numbers of renters means that rents have been soaring in recent months for anyone whose tenancy has come to an end.” 

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