The Effect of Rising Missed Payments on Mortgage Holders

The recent increase in missed payments for housing, bills, loans, and credit cards has highlighted the financial challenges facing many households. According to the Which? Consumer Insight Tracker, 8.6% of households reported missed payments in the month leading up to 8th March, with mortgage holders and renters being particularly affected.

Mortgage holders experienced a significant 8.1% rate of missed payments, one of the highest levels ever recorded for this group. This has led to a decrease in consumer confidence, with a 3-point drop in confidence regarding their current household situation and a 5-point decrease in their future financial outlook.

It’s noteworthy that while some consumers attribute their outlook to recent government budgets or upcoming economic policies, the majority cited other life factors such as pay increases or struggles with ongoing price hikes as the main influencers on their household situation over the next 12 months.

The report also revealed a worrying trend of missed payments returning to high levels, with the overall rate of missed payments slightly decreasing from 8.8% in March 2023 to 8.6% this year. However, this remains above the 2023 average of 7.9%, highlighting the continued impact of the cost of living crisis on household bill management.

Despite the rise in missed payments, it’s worth noting that the rate of missed mortgage payments for mortgage holders slightly decreased to 2.4% this month, indicating that many are prioritising their mortgage payments over other financial commitments. This may be a result of households adjusting their spending on essentials, with over half (54%) reporting changes to their spending in the last month.

The decline in consumer confidence is evident, with net confidence in their current situation dropping to +20 and their future situation to -8. There are also widespread concerns about the UK economy, as only 21% of consumers believe it will improve over the next 12 months, while half (50%) expect it to worsen.

As the financial strain on mortgage holders and renters continues to increase, it’s clear that many households are facing significant challenges in managing their finances. Hopefully, with the right support and interventions, these families can weather the storm and emerge stronger on the other side.