Londoners and those living in the South East of England are 55% more likely than those living in other parts of the UK to have trouble paying their mortgages, according to the data, highlighting the uneven impact of the cost of living crisis. I’m here.
of Financial Conduct Authority On Friday, 5.9% of 1.8 million home loan holders in London and the South East said they were at risk of being “financially squeezed” by mid-2024. According to regulators, the financially challenged person has a mortgage, which costs her more than 30% of her gross income.
The findings highlight the vulnerability of Londoners’ living standards to high housing costs. The data show that median income in the capital is no higher than in other parts of the country, as measured by subtracting housing costs.
share of Housing loan The risk of default across the UK, excluding London and the South East, is 3.8%, followed by North East England (2.3%), Northern Ireland (2.4%) and Scotland (2.8%).
The FCA released figures as it finalized guidance to support risky borrowers, including proactively communicating options for banks to avoid default. According to Watchdog, the bank reached out to 16.5 million customers last year to provide support, a number he expects to grow to 20.5 million over the next 12 months.
“Our research shows that most people are keeping up with their mortgage payments, but some may face challenges,” said FCA’s Consumer and Competitor. Executive Director of Sheldon Mills said, adding that anyone worried about default should contact their bank sooner or later.
The national at-risk mortgage situation improved to 356,000 from a forecast of 570,000 last fall. The FCA said the 570,000 figure was based on interest rate forecasts for September 2022, when bank rates were projected to peak at 5.5%. That data was calculated based on the expectation that interest rates will now peak at 4.5%.
The FCA’s findings that London-based households with mortgages are more likely to be financially distressed are in line with various recent studies showing that the capital’s standard of living is no longer above average. I am doing it.
According to official statistics, the average after-tax household income in London is higher than in any other region or country in the UK, but the level of disposable income after deducting rent and mortgage interest is higher than average. not shown.
Since the 2008-2009 financial crisis, income growth in the capital has rapidly outpaced the rest of the country, and the UK’s productivity growth has been below average.
In last week’s report, the city center Slowdown in London productivity growth Due to a disproportionate amount of overall weakness in the UK economy since the crash 15 years ago.
The think tank said unaffordable housing prices in the capital are discouraging skilled people from moving there, affecting output per hour worked.
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