Tens of thousands of homeowners are facing higher repayments or may find it harder to remortgage over the next 12 months, according to a new survey.
Many people have seen their circumstances change since originally securing a mortgage with their existing lending, owed largely the coronavirus pandemic, and those facing financial hardship or earning less could see their chances of securing credit in future drop, while they are likely to see an increase in the costs of remortgaging.
Almost a quarter – 23% – of homeowners are concerned about renewing their mortgage during the pandemic, a new poll commissioned by specialist broker Willow Private Finance shows.
A third – 32% – of respondents said their income was less secure now than before the pandemic, while just over one in 10 have had to take a payment holiday on their mortgage during Covid-19 crisis, which means they will have their missed payments spread over the rest of the payment term meaning higher costs from next month.
The proportion of those feeling less financially secure during the pandemic increases to 63% among the self-employed, as job losses starts to mount.
The coronavirus crisis has claimed jobs across the economy, sparking the biggest increase in unemployment for more than a decade.
According to the Office for National Statistics, there was a 138,000 rise in unemployment between June and August – the largest increase for 11 years – taking the jobless total to a three-year high of 1.52m as the rate of unemployment jumped to 4.5%, from 4.1% in the previous three months.
What’s more, with almost three million workers still on furlough, further job losses are “inevitable”, according to the Resolution Foundation think tank.
Wesley Ranger, managing director of Willow Private Finance, said: “This is a ticking time bomb waiting to explode. Millions of mortgage holders in Britain are up for renewal in the next 12 months with changed circumstances.
“On top of all the other fears at the moment they are having sleepless nights worrying if they will be able to renew or even pay they bill.
“We are calling on the industry to show leniency for people with changed circumstances and for the government to extend its mortgage support scheme with urgency.”