Credit, Collections & Insolvency News
Latest ONS data on the cost of living shows that despite the easing in inflation, many people remain concerned over their credit commitments.
In the latest period, just over 4 in 10 (44%) adults who are currently making rent or mortgage payments reported that these payments had gone up in the last six months, with 35% reporting that they are finding it very or somewhat difficult to afford these payments. Younger adults (16 to 29) in particular appear to be noticing the impact of increased rent and mortgage payments, with 44% of respondents finding it difficult to afford their payments.
Over a fifth (22%) also said that they had to borrow more money or use more credit than usual in the last month, compared to a year ago.
Commenting on the data, Tom Cuppello, Director, Risk, at Broadstone said “Despite inflation coming down and a declining proportion of adults seeing marked increases in their day to day living costs, it is clear that the price rises over the past couple of years are still heavily impacting housing finances.
“This is impacting the borrowing market where over one in five adults say they are borrowing more consumer credit than usual compared to a year ago. Over a third of adults are also struggling to meet rental or mortgage repayments. While this figure is no longer increasing month-on-month, it remains a concern following the latest FCA mortgage lending data which revealed the value of outstanding mortgage balances with arrears increased by 4.2% through Q1 2024, to £21.3 billion, and is 44.5% higher than a year earlier.
“Consumers in difficulty should seek support from their lender should they be experiencing difficulties making repayments on their credit commitments. Lenders must also invest in their customer experience teams to ensure they are prepared to provide a high level of care for those experiencing financial issues.”