An estimated 700,000 households missed a housing payment in the last month, new Which? research suggests, as the consumer champion calls on essential businesses to do more to support people through the cost of living crisis.
Missed housing payments were particularly high among renters – with one in 20 (5.2%) renters surveyed missing a payment in the last month. Missed rent payments have stayed at a high rate throughout the last year, showing many are struggling to keep a roof over their head.
A significant number also missed mortgage payments in the last month – 3.1 per cent of mortgage holders surveyed – as Bank of England interest rates continue to climb.
Worryingly, overall 2 million households missed or defaulted on at least one mortgage, rent, loan, credit card or bill in April. The 7.3 per cent missed payment rate observed is in line with the level seen at the same time last year, but higher than in April 2021 (6.5%) and April 2020 (5.2%).
Bills remain the most common type of missed payment among the population as a whole (4.4%) – with energy bills most commonly missed (2%), followed by council tax (1.6%).
Six in ten (59%) households reported making at least one adjustment to cover essential spending such as utility bills, housing costs, groceries, school supplies and medicines in the last month. This equates to an estimated 16.6 million households.
Adjustments include cutting back on essentials, dipping into savings, selling possessions or borrowing. This is consistent with the high adjustment level seen for the past year, and matches the level seen in April 2022, but is much higher than the 35 per cent seen two years ago.
With the Bank of England predicted to raise interest rates again next Thursday, consumers will continue to face financial pressures throughout 2023. If people are missing or struggling to afford essential payments – such as energy, credit card or mortgage payments – then they should speak to their provider immediately for help.
Which? has also launched a campaign calling on essential businesses – energy firms, broadband providers and supermarkets – to do more to help consumers struggling to make ends meet and ensure they are providing value for money.
Rocio Concha, Which? Director of Policy and Advocacy, said “It’s very worrying that so many households are missing housing payments. We’d encourage anyone who’s struggling to seek free debt advice and reach out to their mortgage provider or landlord for help.”
“As so many people face financial hardship, Which? is calling on businesses in essential sectors like food, energy and telecoms providers to do more to help customers get a good deal and avoid unnecessary or unfair costs and charges during this crisis.”