The Financial Conduct Authority (FCA) has nearly halved the number of mortgage borrowers it expects to be at risk of defaulting on their mortgage payments by mid-2024.
The regulator has suggested that, in addition to the households already behind on payments – c. 200,000 in June 2022 – 356,000 mortgage borrowers could face payment difficulties by the end of June 2024.
While still described as “significant”, this is down 214,000 from the 570,000 borrowers the FCA previously estimated in September last year.
The FCA put the lower figure down 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.
Final mortgage guidance setting out the ways lenders can help customers worried about or already struggling with their mortgage payments because of the rising cost of living has also been confirmed. Guidance covers options such as extending the term of their mortgage or making reduced monthly payments for a temporary period.
In line with its three-year strategy, the regulator has previously reminded firms of the standards firms should meet to support struggling borrowers and where they need to improve their treatment of those in financial difficulty. This follows on from action taken during the pandemic to protect borrowers, including introducing its tailored support guidance.
The FCA said will continue to monitor the mortgage market and how firms are supporting their customers.
“A slightly rosier forecast should not be misconstrued as a signal that we are out of the woods,” said Charlotte Nixon, mortgage expert at Quilter, adding:
“Millions of people will still face hardship because of their mortgage bills and many others will fall behind putting them in a dangerous financial situation.”
