Renters and mortgage holders have been hard-hit by the cost-of-living crisis (Picture: Getty Images)
An estimated 700,000 UK households missed out or defaulted on a rent or mortgage payment last month.
Renters were among the most hard-hit, with missing payments ‘particularly high’ and affecting one in 20 tenants surveyed by Which?.
Mortgage holders aren’t immune to the pressures of the cost-of-living crisis either, the consumer watchdog found in a report published today.
Around 2,000,000 households (7.3%) missed out or defaulted on at least one mortgage, rent, loan, credit card payment or bill in April.
This was about in line with Which?’s monthly consumer insight tracker this time last year but higher than in April 2021 (6.5%) and April 2020 (5.2%).
But April’s is lower than what it was in March this year when an estimated 2.5 million households (8.8%) missed or defaulted.
Housing payments are proving to be a major sticking point for British households amid double-digit inflation (Picture: PA)
According to the findings, a ‘significant number’ (3.1%) of home loan borrowers couldn’t make their mortgage payments in April after the Bank of England raised interest rates.
The central bank is poised to tighten the squeeze on households even further by hiking up interest rates for the 12th time on Thursday to 4.5%, the highest since October 2008.
Bills, especially energy and council tax, were the most commonly missed payment for the 2,000 people polled by Which?.
People are turning to increasingly desperate ways to cover utility bills, housing costs, groceries, school supplies and medicines.
Three-fifths (59%) have made an ‘adjustment’ to their monthly spending to keep a roof over their head.
This ranged from cutting back on basic essentials (the price of groceries has more than doubled in a year), dipping into savings, flogging possessions or borrowing.
The Bank of England is set to hike interest rates for the 12th time this Thursday (Picture: EPA)
While people have long pinched pennies to get by, Which? stressed that the 59% figure is higher than the 39% it was only two years ago.
Rocio Concha, the consumer body’s policy and advocacy head, said it’s ‘worrying’ that Brits today are resorting to such cost-cutting measures.
‘We’d encourage anyone who’s struggling to seek free debt advice and reach out to their mortgage provider or landlord for help,’ she said.
‘As so many people face financial hardship, Which? is calling on businesses in essential sectors like food, energy and telecoms providers to do more to help customers get a good deal and avoid unnecessary or unfair costs and charges during this crisis.’
Bank of England policymakers raised interest rates in March to 4.25%, from near zero, after inflation abruptly swelled to 10.4%.
Consumer prices had decreased ever so slightly for the three months before but now stubbornly remain in the double-digits, panicking bank policymakers, government officials and people alike.
Renters may end up handing 40% of their income to landlords by the end of the year, a housing market analysis predicts (Picture: Shutterstock)
April proved to be an especially difficult month for Brits, as everything from water and broadband bills to council tax and drug prices increased.
In December, an analysis found that rent soared twice the pace of wages in 2022, with the average rent for a new letting at £1,078 a month, a £117 increase compared to last year.
Single renters hand landlords around 35% of their incomes, the highest in more than a decade, rental portal Zoopla found.
This year, Zoopla said it expects this rental pain to reach 40%.
Al McClenahan, training lead for helping rental rights group Justice for Tenants, said renters have next to no ‘discretionary money left’.
‘Tenants are reporting extreme distress as it is hard to prioritise rent if your child is complaining they are hungry and cold,’ he told Metro.co.uk.
Grocers have more than doubled in price, among the basic essentials Brits are cutting back on to get by (Picture: AFP)
‘The cheapest ranges in supermarkets for the basics like rice and pasta have gone up far quicker than luxury brands, and that has hit those families on the edge the hardest.
‘It is heartbreaking to hear tenants say they can’t accept potatoes from a foodbank because they cannot afford the long cooking times.’
To McClenahan, tenants are feeling ‘trapped’ as landlords exit the market, ‘which creates a particularly vicious short-term spike in rent increases’.
Tenants, with few legal protections, have to choose between rent increases or moving out to ‘unsuitable’ homes.
‘Often tenants stay because they cannot afford the moving costs,’ McClenahan added, ‘or do not want their children to miss a school year or be far away from their support network.’
Get in touch with our news team by emailing us at [email protected].
For more stories like this, check our news page.
‘Tenants are reporting extreme distress.’