Martin Lewis has warned renters there will be a "nightmare year" ahead due to rising mortgage and rental costs.
The money-saving expert said he expects mortgage arrears to go on the rise. He added that he is "very worried" for renters and stressed that rules for renters should be re-examined.
Appearing on ITV's Good Morning Britain today (June 27), he said: "It’s going to be a nightmare year.” It comes after a new mortgage charter was agreed to by lenders representing around 85 per cent of the mortgage market, following a meeting between the Chancellor and banks on Friday last week.
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The new charter allows customers who are up to date on their payments to switch to interest-only payments for six months or extend their mortgage term in order to reduce monthly payments. Borrowers will also have the option to revert to their original term withing six months by contacting their lender.
Asked if he expects to see a big rise in home repossessions, Mr Lewis said: “No, I don’t think we will… for two reasons.
“One, because one of the agreements that was made at the meeting on Friday is banks will not look to repossess, unless the individual wants that to happen, for at least a year from the first missed payment. So there is a little bit of time being bought there.
“And two, because the courts are absolutely clogged up. Even if you started repossession proceedings now, from what I’m hearing it would take 18 months before they were heard.”
He continued: “I think we’re going to see some very substantial arrears…I think we’re going to see people voluntarily getting rid of their homes.
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“I’m very worried for renters out there that they’re not able to afford to pay what they need. And that we really do need to look at what’s going on in the renting situation.”
He highlighted “inflation, prices are going up and the economy’s teetering on the brink of recession… And it is a nightmare scenario. And it is very difficult for any politician to know what to do. Or me, or you.”
Mr Lewis said: “The situation for renters is still one of those untapped, unsolved problems; of course much of that is also from the knock-on to the problems in the mortgage market.”
Asked what help struggling renters can get, Mr Lewis said there are rent advisers based at local councils and welfare centres.
He said: “If you feel your rent is being put up in a way that is prohibitive and unfair, absolutely seek advice from a renting adviser, go talk to the local council, many councils will have renting officers, who can help with private rents.”
He added: I welcome the mortgage forbearance measures… it’s not going to help everyone, what I hope it will do is just allow some people to get over the hump. I think we need to look at renting, we need to look at the rules for renters because it’s going to be a very difficult period for renters too.”
Mr Lewis has been pushing for banks to pass on interest rate rises in savings rates, which could also help with inflation by encouraging people to put their money away. And we need to focus on savers… and if we give savers better rates then we might not need to continue to push rates up as high.”
