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One-in-three London homeowners ‘will struggle to meet mortgage payments’

Polling suggests 34% of mortgage payers in the capital will find it difficult to make monthly payments within six months, reports Noah Vickers, Local Democracy Reporter

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One in three London homeowners say they will struggle to meet their mortgage payments in the next six months, new polling reveals.

The survey, conducted by YouGov and commissioned by City Hall, showed that 11% of the capital’s mortgage payers think they will “definitely” struggle to keep up with payments and a further 23% will “probably” struggle.

The combined total of 34% saying they expect to struggle is up from 21% in January.

Sadiq Khan said the data further proved the need for government intervention, arguing that ministers “have so far failed to recognise the scale of the crisis”.

The London mayor warned: “Hundreds of thousands more London households will see their mortgages skyrocket this year and next, with those on lower incomes at greatest risk of defaulting on their mortgage payments, getting into debt, or losing their homes.”

A new City Hall analysis has meanwhile shown that 384,000 London households have been hit by rising mortgage rates since former prime minister Liz Truss’s ‘mini budget’ last year, comprising those who are either on variable rate mortgages, or have come off fixed rates since October 2022.

According to the Institute for Fiscal Studies, the additional cost to London homeowners is around £520 a month – meaning a total sum of around £2.4bn for the capital’s affected households.

An estimated further 209,000 London households could see their mortgage payments rise over the next year as they come off their current fixed rate deals.

In a fresh plea to ministers, Khan called on the government “to take urgent steps to protect London’s homeowners”, including through the reinstatement of mortgage payment holidays.

He also urged them to reverse cuts to support for mortgage interest through the social security system, and allow owners in significant difficulty to switch their housing tenure to affordable rented or shared equity, to allow them to remain in their homes.

The government had not responded to a request for comment at the time of publication.

Responding to similar concerns raised by the mayor in June however, a Treasury spokesperson said: “We know this is a concerning time for mortgage holders. Lenders are already required to engage individually with their customers who are struggling to provide support that is tailored to their circumstances.

“Support could include extending a person’s mortgage term to reduce monthly payments, offering a switch to interest only payments, payment deferrals, rate discounts, or part interest-part repayment.”