A third of mortgage holders struggling to pay with minority groups worst affected: ONS

More than a third of people are now struggling to afford their mortgage or rent payments, according to new research from the ONS.

Its latest survey, conducted between February and May, revealed that around a third (35%) of adults reported it was difficult (very or somewhat) to afford their rent or mortgage payments.

Broken down, 43% of renters and 28% of mortgage holders reported that it was difficult to afford their repayments.

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%), and disabled adults (41%).

The survey also found that around half of adults (48%) who currently pay rent or a mortgage reported that their payments had increased in the last six months and this proportion has gradually increased since February 2023.

In the latest pooled period, those renting (42%) were more likely to report an increase in their payments than mortgage holders (32%).

ONS data shows that private rental prices paid by tenants in the UK increased by 5.0% in the 12 months to May 2023, the largest annual percentage change since this UK series began in January 2016.

Karen Noye, mortgage expert at Quilter, commented: “Harrowing figures from the Office for National Statistics show that one in four adults in the UK are now experiencing financial vulnerability, illustrating just how many people are struggling to afford even the bare necessities as cost-of-living pressures pile on. One in 20 people reported they are unable to put food on the table, and more than a third (35%) of adults are finding it difficult to afford their rent or mortgage payments.

“Mortgage holders and renters are among those with higher odds of experiencing financial vulnerability, and this will largely be due to soaring mortgage interest rates and higher rent costs. Indeed, 27% of people reported that their rent or mortgage costs had caused their cost of living to increase compared to just a month ago. While this figure is already relatively high, it suggests there are still a lot of people who are shielded by previous fixed rate mortgage deals. As more people’s deals run out and they are faced with the prospect of drastically higher rates, we can expect this figure to increase significantly.

“Given mortgage rates have hit the highest level for 15 years, with the average two-year fixed mortgage rate reaching 6.6% earlier this week, an increasing number of people will struggle to afford their rising payments."