The number of homeowners who have fallen behind on their mortgage repayments has risen sharply in the last 12 months following consistent interest rate rises and the cost-of-living crisis.
What do the stats say?
As this Guardian article sets out, numerous surveys have highlighted that 700,000 households in the UK have defaulted on a rent or mortgage payment in 2023.
In the three months to 30 September 2023, more than 87,000 homeowners were in mortgage arrears, which is 7% higher than during the previous three months and almost 20% up on the year overall. As a result, many homeowners have been forced to make tough decisions, including putting pension contributions on pause and moving to a more affordable property.
So, what can you do to put yourself in the best possible financial position if you’re thinking about purchasing a property in the near future?
The importance of factoring additional costs into the property-buying process
When purchasing a property, it is imperative to factor in the additional costs, such as conveyancing and a survey, that mount up when completing the transaction. The home buyers report cost is not one to cut back on, as this report is designed to flag any property defects that if undetected could lead to huge costs later down the line. More information on the different types of homebuyers surveys can be found here: https://www.samconveyancing.co.uk/news/house-survey/homebuyers-survey-cost-9958.
It is worth noting that the government’s mortgage charter pledges that no property will be repossessed within the 12 months immediately following the first missed payment. However, many industry experts and politicians are calling for greater protections during what is primed to continue to be a challenging time financially. These protections would include a rescue scheme which protects homeowners who are at a high risk of losing their property.