670,000 have already missed payment over the past year
Nearly half a million UK mortgage holders are projected to miss a payment within the next six months, according to new data from AI-driven financial communication platform Eligible.
The latest figures should alarm the approximately 1.6 million mortgage holders expected to renegotiate their agreements by year’s end, suggesting that many could be pushed towards greater financial instability.
Over the past year, around 670,000 have already missed a mortgage payment, Eligible noted.
Amid rising living costs and escalating energy bills, 5.4 million Brits have identified their mortgage payments as a significant source of financial stress. A key issue, according to Eligible, is the lack of effective communication between lenders and borrowers, with research indicating that 1.3 million UK residents do not fully grasp their mortgage terms, primarily due to insufficient two-way communication with their banks.
Following the Financial Conduct Authority’s introduction of Consumer Duty, which mandates better consumer outcomes through proactive service, the pressure is mounting on banks to improve real-time, tailored communications with their clients.
Eligible suggests that banks can employ advanced technologies like their own machine learning programs to identify at-risk customers and provide personalised support tailored to individual circumstances.
“The fundamental problem is that mortgages are a financial product that customers take out only once every three to five years,” said Zahra Hassan (pictured), co-founder of Eligible. “This means that they aren’t regularly engaging with their mortgage and aren’t in the loop of what all their options are.
“In a broader sense, rising interest rates, coupled with increased energy and living costs, heighten vulnerability to default. However, the key factor that pushes someone from financial strain to actual default is their lack of awareness about the array of options that their bank could have offered to temporarily ease their financial burden, particularly on their largest financial obligation – their mortgage.
“What’s needed is an active two-way dialogue. This way, borrowers can better appreciate that lenders are here to assist them.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
