Two million UK households missed or defaulted on at least one mortgage, rent, loan, credit card payment or bill last month.
Analysis has found that out of these, 700,000 had missed their housing payments as the cost-of-living crisis continues to bite. Research by consumer group Which? showed the 7.3 per cent missed payment rate seen in April was in line with the level at the same time last year but was higher than in April 2021, which was 6.5 per cent, in April 2020 when it was 5.2 per cent.
Missed housing payments were particularly high among renters, with one in 20 polled saying they had missed a payment in the last month. These missed rent payments have stayed at a high rate throughout the last year, showing many are struggling to keep a roof over their heads. Some 3.1 per cent of those surveyed also missed mortgage payments in the last month as Bank of England interest rates continue to climb.
Bills remained the most common type of missed payment among the British population as a whole, with energy bills most frequently missed, followed by council tax. The shock figures come among a backdrop of rising costs putting a strain on UK households in recent months. Energy bills have risen steeply and, while the Government gave all households with a domestic electricity connection £400 split over six months to help with costs, the scheme came to an end in April.
Meanwhile, there is ever-rising inflation. In April, food inflation increased to 15.7 per cent in April, up from 15.0 per cent in March. Fresh food inflation accelerated in the same month to 17.8 per cent, up from 17 per cent in March, the BRC-NielsenIQ Shop Price Index found. This Thursday, the Bank of England is set to hike interest rates for the 12th consecutive time, with lenders already putting up mortgage interest rates.
Those on tracker mortgages will see an instant increase, while those on fixed deals will pay worse rates when their deals end. Data from Rightmove released last week saw mortgages for new UK first-time buyers were up nearly £200 a month on a year ago due to higher home loan rates and record asking prices.
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