UK Homeowners are Struggling with Higher Interest Mortgage Payments

Interest rates are rising and homeowners with mortgages are struggling right now. Data from UK Finance shows the number of home repossessions jumped by 50% in the first three months of this year. That’s an alarming figure, yet the end is not in sight, with many people on cheap fixed-rate deals seeing their deals coming to an end soon.

UK Homeowners Struggling with Mortgage Payments

A more in-depth look at the data published in Which? reveals that it isn’t just homeowners who are struggling with rising interest rates. Buy-to-let landlords are also feeling the pain, although not quite as badly. Homeowner and landlord repossessions have been rising steadily since the second quarter of 2020, with homeowner repossessions hitting 750 in Q1 of this year, and landlord repossessions at 410 in the same period. While this figure looks alarming, it’s important to remember that it takes time for such cases to be processed by the courts, and overall, repossession levels are lower than pre-2020.

Could the UK be Heading for a Big Reset?

Anyone looking for a fixed-rate mortgage deal at the moment will have to pay just under 6 percent for a two-year deal. Five-year fixed-rate deals are currently around 5.5 percent, but lending conditions are fluid and mortgage borrowing has plummeted as borrowers become increasingly spooked by rising interest rates.

It’s likely interest rates will rise again, according to officials at the Bank of England’s Monetary Policy Committee. In addition, the number of mortgage deals available to people hoping to refinance has fallen to less than 5,000 in a month. Some lenders, including Santander, have pulled all mortgage offers for new customers, plunging the market into disarray. Around 116,000 homeowners are predicted to see their fixed-rate deals end this month, which will make mortgage repayments unaffordable for some.

Homeowners are Struggling

Rising interest rates in conjunction with the cost-of-living crisis are hitting homeowners hard. The Bank of England’s base rate is currently 4.5%, which is the highest it has been since 2008. Prices for food, energy, and fuel are rising across the board, placing even greater pressure on homeowners struggling to pay their mortgages.

The Consumer Price Index was 8.7 percent last month, and with experts predicting the Bank of England will raise the base rate to 5.5 percent by the end of the year, the pressure on homeowners with mortgages is unlikely to ease any time soon.

What are Your Options if You are Struggling to Pay Your Mortgage?

It is important not to panic if you are coming to the end of a cheap fixed-rate deal or are finding your current repayments unaffordable. No matter how bleak things look right now, there are always options.

Speak to Your Lender

Talk to your lender if you are experiencing financial difficulties. You mustn’t stick your head in the sand. Money problems don’t go away if you ignore them!
Lenders will offer support if you contact them. There are various things a lender can do to help, such as offering you a payment holiday or letting you switch to interest-only repayments.

Government Help

Any homeowners claiming means-tested benefits may be eligible for government help. A Support for Mortgage Interest loan can cover the cost of interest in a standard mortgage. The help also applies to loans taken out to make a home more habitable or suitable for a person with disabilities. The money available is paid as a loan, which is then repaid when you sell the property or transfer it to another person. SMI is available for up to £200,000 on a mortgage or an eligible loan. Check the Department for Work and Pensions (DWP) for details.

What Happens if You Are Facing Repossession?

Lenders only move to repossess homes as a last resort. They will always work with you first to find a solution. If a mortgage lender does decide to start repossession proceedings, it must notify you first. It will write to you, giving you five days’ notice of court action. It must also explain why it is taking this step.

f you have received a letter from your lender, informing you it is applying to the court for a repossession order, contact us. We are here to help people facing repossession. Try not to panic, as there are lots of things we can do to help you keep your home. All you need to do is get in touch.

Homeowner Management Services has been protecting people from repossession for years. We are the Repossession Expert and can help you keep your home and stop repossession. If you are under threat of repossession then call our team on 0800 298 0571 immediately and we will work with you to keep your home.