Almost a third of people are struggling to afford their mortgage repayments, new research from the Office of National Statistics (ONS) statistics have shown.
The survey showed that 43% of renters and 28% of mortgage holders say they are struggling to keep up.
The difference between renters’ and mortgage holders’ likelihood of experiencing some form of financial vulnerability may reflect that, on average, renters report spending a higher proportion of their disposable income on rent (21%), than mortgage holders on their mortgage (16%).
Other groups with higher odds of experiencing financial vulnerability included adults aged 25 to 34 years (3.4 higher odds compared with those aged 75 years and over) and disabled adults (1.9 higher odds compared with non-disabled adults)
The survey says that around a third (35%) of adults reported it was difficult (very or somewhat) to afford their rent or mortgage payments, this proportion appeared higher among groups including; those receiving support from charities (57%), living in a household with one adult and at least one child (47%), receiving some form of benefits or financial support (45%), Asian or Asian British adults (53%), Black, African, Caribbean or Black British adults (47%), renters (43%) and disabled adults (41%)
Around four in ten (43%) renters reported that it was difficult to afford their rent payments, and around 3 in 10 (28%) mortgage holders reported it was difficult to afford their mortgage payments
Around one in twenty (5%) of adults reported that in the past two weeks they had ran out of food and had been unable to afford more, this proportion appeared higher among groups including; those receiving support from charities (45%), living in a household with one adult and at least one child (28%), receiving some form of benefits or financial support (21%).
Laura Suter, Head of Personal Finance at AJ Bell, comments on the latest ONS figures on the cost of living crisis said “Renters and young people are feeling the brunt of the cost of living crisis, pushing more to become financially vulnerable. Young people have less financial resilience, meaning that even small financial hurdles can derail them. But sticky inflation, coupled with landlords passing on higher costs, means that young renters are being hit from both sides.”
“With news today that the number of properties available in the UK has hit a 14-year low, it’s no surprise that rental prices are climbing. It means that on average renters are now handing over more than a fifth of their disposable income just to keep a roof over their head – and that’s before they’ve heated it, turned on the lights or paid council tax. It means that around four in 10 renters are now finding it difficult to pay their rent.”
“The figures lay bare just how difficult some households are finding this drawn-out cost of living crisis, with around 2.65 million UK adults having run out of food and being unable to afford more in the past two weeks. The price of the food shop continues to be the biggest squeeze on household budgets, with 96% of people saying they were seeing the cost of their food rising over the past month. While supermarkets have offered some hope that prices will start to fall soon, that’s cold comfort to those who are struggling to afford the essentials now.”
“What we’re seeing emerge is a split society: those who are facing higher rent or mortgage costs thanks to rising interest rates are far more likely to be experiencing financial vulnerability, compared to older and wealthier people who own their own home outright and so are protected from the negative effects of rate hikes.”
“But while prices might start to ease, reducing some of the pressure on household finances, these figures highlight that many homeowners have more pain to come. Only a third of mortgage holders have seen their costs increase in the past six months, highlighting just how many people haven’t yet faced the gauntlet of rising mortgage rates. As more people roll off their fixed rate deals onto far higher costs, we’ll see those struggling to keep up with payments increase.”