Credit, Collections & Insolvency News
The Financial Conduct Authority (FCA) has warned that more than 750,000 households are at risk of defaulting on their mortgages over the next two years as soaring borrowing costs make payments unaffordable.
The financial regulator said that over 200,000 households had already fallen behind on payments by the end of June 2022 – with bills overdue on around one in 40 home loans.
FCA’s Chief Executive, Nikhil Rathi has suggested many of these households are already thousands of pounds behind, with 117,000 borrowers failing to pay a sum equal to more than 1.5% of the balance of their mortgage.
The FCA said a further 570,000 households were at risk of payment shortfall within the next two years, meaning their mortgage costs are set to climb to more than 30% of their income.
The FCA highlighted that repossession numbers are currently low. While the most recent data have been distorted by a backlog in the courts owing to the pandemic, the FCA said there were 835 repossessions in the three months to June, which the FCA says is an extremely low number.
