Consumer concern about housing costs hits highest levels recorded, Which? research finds
Worries about housing costs have hit the highest levels ever recorded by Which?’s Consumer Insight Tracker, as interest rates are widely expected to rise further.
Which?’s latest Consumer Insight Tracker recorded highest levels of concern around housing costs – with 4 in 5 mortgage owners (79%) and 4 in 5 renters (81%) saying that they were worried about housing costs. The consumer champion has been recording housing cost worries since 2013.
There has been a steady increase in housing cost concern amongst renters over the past two years, with six in 10 (62%) saying they were concerned in August 2021.
Worries about housing costs have risen even faster for mortgage holders due to high interest rates. Before December 2021 – when the interest rate hikes began – around half of mortgage holders were worried about housing costs compared to 4 in 5 in the month to August 10th 2023.
Despite this rise in worry, the number of people missing housing payments has not risen this month. An estimated 630,000 households missed a mortgage or rental payment in the month to August 10th this year.
Worryingly, 2.2 million households missed or defaulted on an essential payment – such as a housing, bill, loan or credit card payment – in the month to August 10th.
Of these missed payments, 1.4 million households missed or defaulted on a household bill payment. Water, council tax and energy were the most commonly missed household bills. Of those who missed a household bill payment, half (50%) missed a council tax bill, almost half (46%) missed a water bill and four in 10 (48%) missed an energy bill.
Worryingly, two-thirds (61%) of those who missed a household bill payment reported that they missed more than one.
Over half (56%) of households reported making at least one adjustment – such as cutting back on essentials, dipping into savings, selling possessions or borrowing – to cover essential spending such as utility bills, housing costs, groceries, school supplies and medicines in the last month. This equates to an estimated 15.8 million households.
Adjustments include cutting back on essentials, dipping into savings, selling possessions or borrowing. This is slightly down from the higher level seen last month (59%), but is still much higher than the 40 per cent seen two years ago.
With the Bank of England widely expected to raise interest rates again on 21st September, pressures on household finances will only continue. If people are missing or struggling to afford essential payments – such as mortgage, energy, credit card payments – then they should speak to their provider immediately for help or seek free debt advice if they are struggling with multiple payments.
Which? is also running a campaign calling on essential businesses – energy firms, broadband providers and supermarkets – to do more to help consumers struggling to make ends meet and ensure they are providing value for money.
Rocio Concha, Which? Director of Policy and Advocacy, said:
“Although UK inflation is slowly starting to fall, these record levels of worry about housing costs and the looming threat of higher interest rates later this month shows that for many people, the cost of living crisis is far from over. We’d encourage anyone who’s struggling to seek free debt advice and reach out to their mortgage provider or landlord for help.
“As so many people face financial hardship, Which? is calling on businesses in essential sectors like food, energy and telecoms providers to do more to help customers get a good deal and avoid unnecessary or unfair costs and charges during this crisis.”
ENDS
Notes to editors
Which? cost of living campaign
The consumer champion is running a campaign calling on businesses in essential sectors – supermarkets, telecoms and energy – to do more to help their customers through the cost of living crisis. More information on the campaign is available here.
Which? advice if you’re struggling to pay your rent or mortgage
Start by contacting your bill provider to see if you are missing out on any discounted tariffs or reductions and if they can help you find a payment plan you can afford. More information here.
Energy providers should not just disconnect people and can help customers find a payment plan they can afford, and may be able to refer you to additional hardship funds. If people have a traditional prepayment meter and cannot afford to top it up, they should contact their energy supplier for help to keep their supply going. They may be able to access emergency credit – though you will eventually need to repay this through a payment plan. More information here.
If households are struggling to afford their mortgage, they should speak to their lender as soon as possible. Speaking to your lender will not affect your credit rating. Lenders should be understanding if income levels have changed – for example, because someone has lost their job – and may offer a payment holiday, extending the term to lower the monthly payment or a temporary switch to interest-only repayments. Renters should speak to their landlords about their situation and ask if they are able to offer temporary help. More information here and here.
Consumer insight tracker
The consumer insight tracker is an online poll conducted monthly by Yonder on behalf of Which?. It is weighted to be nationally representative with approximately 2,000 respondents per wave.
Which? estimates that between 1.6 per cent and 2.8 per cent of households missed or defaulted on a housing (mortgage or rent) payment in the last month, with an average estimate of 2.2 per cent. Based on the survey and the ONS estimate for the number of households in 2022 of 28.2 million, this scales up to between 450,00 and 800,000 households missing a housing payment in the last month, with an average estimate of 630,000.
Which? estimates that between 6.6 per cent and 8.9 per cent of households missed or defaulted on a housing, bill or credit payment in the last month, with an average estimate of 7.8 per cent. Based on the survey and the ONS estimate for the number of households in 2022 of 28.2 million, this scales up to between 1.9 million and 2.5 million households missing a bill payment in the last month, with an average estimate of 2.2 million.
Which? estimates that between 3.9 per cent and 5.8 per cent of households missed or defaulted on a bill payment in the last month, with an average estimate of 4.9 per cent. Based on the survey and the ONS estimate for the number of households in 2022 of 28.2 million, this scales up to between 1.1 million and 1.6 million households missing a bill payment in the last month, with an average estimate of 1.4 million.
The survey indicates that between 54 per cent and 58 per cent of households made an adjustment to cover essential spending in the last month, with an average estimate of 56 per cent. Based on the survey and the ONS estimate for the number of households in 2020 of 28.1 million, Which? estimates that between 15.2 million and 16.4 million households made an adjustment to cover essential spending in the last month, with an average estimate of 15.8 million.
Figure 1: Four in five mortgage owners and renters worried about housing costs
Source: Which? Consumer Insight Tracker, Online Poll weighted to be nationally representative, approx 2,000 respondents per wave.
Figure 2: 7.8% of households said they had missed a payment in the last month
Source: Which? Consumer Insight Tracker, Online Poll weighted to be nationally representative, approx 2,000 respondents per wave. The chart shows the proportion of households who have missed a housing, bill, loan or credit card payment in the last month.
Figure 3: Over half of households made at least one adjustment to cover essential spending in the last month
Source: Which? Consumer Insight Tracker, Online Poll weighted to be nationally representative, approx 2,000 respondents per wave. Adjustments include: cutting back, dipping into savings, borrowing from friends and family, taking out credit cards or loans, selling items, using an overdraft.
About Which?
Which? is the UK’s consumer champion, here to make life simpler, fairer and safer for everyone. Our research gets to the heart of consumer issues, our advice is impartial, and our rigorous product tests lead to expert recommendations. We’re the independent consumer voice that influences politicians and lawmakers, investigates, holds businesses to account and makes change happen. As an organisation we’re not for profit and all for making consumers more powerful.
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