Approximately 1.3 million mortgage holders with mental health problems are likely to have cut spending on essentials such as food and energy, according to a campaigning group.
According to research from Money and Mental Health Policy Institute, based on a survey of 2,150 adults, around 30% of mortgage holders with mental health issues said they had reduced spending on essentials, which compares to just 21% of mortgage holders without such issues.
Mortgage holders with mental health issues were twice as likely, at 29%, to have used savings to make mortgage payments and around 27% said they had cut spending on essential maintenance and repairs to the home. The latter is up from 14% of mortgage holders.
Around half of mortgagors with mental health problems said they would not be able to afford a £200 increase in monthly mortgage payments.
This was estimated to be the typical hike for mortgage holders rolling off a fixed rate by the Bank of England in September last year.
The report said that difficulty maintaining mortgage payments was a source of stress and anxiety but actions from creditors such as “intimidating letters, phone calls and messages when they’ve fallen behind” can “cause huge levels of distress”.
The research also warns that mortgage holders struggling with payments are “missing out on critical support measures from lenders”.
Only 29% of such mortgage holders said they were aware of Mortgage Charter measures and the same figure said that they thought their provider have done a good job in communicating support in the last 18 months.
Over two thirds said that they felt anxious about reaching out to a lender if they were struggling, which compares to under half of mortgage holders without mental health problems.
‘Extremely tough’ for those with mental health issues
Conor D’Arcy, chief executive of the Money and Mental Health Policy Institute said: “The prospect of losing your home because you can’t keep up with payments can be terrifying. That’s why lots of worried homeowners will be relieved to see mortgage rates starting to fall.
“But our research finds that the last year has been extremely tough for many mortgage holders, particularly those with mental health problems. For those coming to the end of a cheap deal in 2024, the outlook can still be a frightening one. That’s why it’s vital that lenders and the Government act now to ease the burden on people who are facing impossible decisions just to keep up with their mortgage payments.”
He added: “The good news is there are options available if you are struggling. We’re calling on lenders to make that help as accessible as possible.
“When you’re struggling with your mental health, simple tasks like cleaning your teeth can be difficult, never mind picking up the phone to tell your lenders that you don’t know how you’re going to afford your next payment.
“It’s crucial that mortgage lenders understand these practical challenges, identify those at risk and reach out to them through a channel that suits them. Doing that would make a huge difference in reducing the stress that can come with mortgage difficulties.”
Money and Mental Health said that lenders should be “more proactive in informing and reminding customers of the support on offer, utilising customer data where possible to identify and target customers most at risk of experiencing payment difficulties”.
It added that customer-facing staff should be trained to help people with mental health issues an offer “practical adjustments”.
The firm added that lenders should make support easier to access, such as “routinely recording customers preferences around communications channels and using their preferred channel when reaching out with support”.
