More than 750,000 households are at risk of defaulting on their mortgages over the next two years.
Rising borrowing costs could make payments less affordable, Britain’s financial regulator has warned.
The Financial Conduct Authority (FCA) said that over 200,000 households had already fallen behind on payments by the end of June 2022. Nikhil Rathi, the FCA’s chief executive, has suggested many of these households are already thousands of pounds behind.
The watchdog said a further 570,000 households were “at risk of payment shortfall” within the next two years.
This will have a direct correlation to the number of repossessed houses for sale available in the UK. If these households continue to default then we will see a rise in the number of repossessed properties available.
According to the Telegraph the warning, issued in a letter to MPs on the Treasury Select Committee, will trigger new fears that a wave of forced property sales could bring down house prices in the coming months.
This comes at the same time of the highest rise in living standards on record after households were hit with rising interest rates and the highest inflation for 41 years.
The number of defaults depended on how many people lose their jobs this year, with the UK economy expected to enter a recession lasting at least until the end of 2023.
Official figures this week showed that monthly mortgage payments will triple for more than 800,000 households this year.
Experts are predicting that some people are at risk of default so they need to change their spending habits to avoid missing mortgage payments.
Although property repossession numbers currently remain relatively low when compared to previous years, it is difficult to avoid the signs of another recession hitting the UK later on in 2023. The rise in living standard costs, higher interest rates and the highest inflation the UK has seen in 41 years cannot be ignored.
Repossessedhousesforsale.com are keeping a close eye on the repossessed property market over the coming months to see if there will be a rise in supply as we start 2023.
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