ao link
Credit Strategy homepage
Intelligence, insight and community
for credit professionals

Dear visitor,
You're reading 1 of your 3 free news articles this quarter

 

Register with us for free to get unlimited news, dedicated newsletters, and access to 5 exclusive Premium articles designed to help you stay in the know.

 

Join the UK's leading credit and lending community in less than 60 seconds.



Register now  or  Login

FCA confirms help for mortgage borrowers struggling with payments

The FCA has confirmed final mortgage guidance, setting out the ways mortgage lenders can help customers struggling with their mortgage payments because of the rising cost of living.

Share on LinkedInShare on Twitter

The FCA has also published new data and analysis on the mortgage market. This shows that, in addition to the households already behind on payments, 356,000 mortgage borrowers could face payment difficulties by the end of June 2024.

 

This is down 214,000 from the 570,000 borrowers the FCA previously estimated in September last year due to changes in market expectations of the Bank of England base rate. Amongst this group those rolling off a fixed rate deal could end up paying an additional £340 a month on average.

 

The FCA’s research found that borrowers aged 18-34 are more likely to be financially stretched than the rest of the working age population. Those living in London and the South East are most likely to be stretched. Being stretched does not necessarily mean borrowers will miss payments as some will be able to use savings, reduce spending, or increase incomes to help meet their mortgage commitments. 

 

The FCA, major lenders and consumer representatives attended a mortgage summit hosted by the Chancellor in December. Since then, the FCA has continued to work with lenders to make sure borrowers get the support they need, including timely communication.

 

Lenders proactively contacted customers a combined total of 16.5 million times, across a range of channels, to offer support in the last year. Following conversations with the FCA, lenders have confirmed they expect to increase this to 20.5 million contacts over the next year.

 

Lenders supported over 2 million customers to manage their finances in the past year, including through budgeting tools, access to debt advice, and tailored mortgage forbearance.

 

The FCA is also working with the Money and Pensions Service, consumer groups and lenders to raise awareness of the help available to mortgage borrowers worried about keeping up with payments.

 

The FCA expects firms to support borrowers in financial difficulty. Its finalised guidance confirms how mortgage lenders can support customers who have missed payments or are worried they may not be able to make payments in future. It covers options such as extending the term of their mortgage or making reduced monthly payments for a temporary period.

 

Sheldon Mills, executive director of consumers and competition at the FCA, said: “Our research shows most people are keeping up with mortgage repayments, but some may face difficulties.

 

“If you’re struggling to pay your mortgage, or are worried you might, you don’t need to manage alone. Your lender has a range of tools available to help. Get in touch as soon as you have concerns, don’t wait until you’re about to miss a payment before doing so. Just talking to them about your options won’t affect your credit rating.”

 

Share on LinkedInShare on Twitter

Stay up-to-date with the latest articles from the Credit Strategy team

Credit Strategy
PPA Independent Publisher Awards 2024

member of

Get the latest industry news 

creditstrategy.co.uk – an online news and information service for the UK’s commercial and consumer credit industry. creditstrategy.co.uk is published by Shard Financial Media Limited, registered in England & Wales as 5481132, 1-2 Paris Garden, London, SE1 8ND. All rights reserved. Credit Strategy is committed to diversity in the workplace. @ Copyright Shard Media Group