About 25% of UK homeowners default on their mortgage payments.
These figures reflect the economic problems suffered by homeowners today.
One in four (26%) existing or aspiring homeowners have previously had an accident or illness, which has left them in financial hardship leading to a default on their mortgage, according to new research from MetLife UK.
MetLife research, which examines consumer views of the housing market, along with the property-buying experience, revealed that one in seven (14%) say this has happened more than once. In addition, a third (34%) of those surveyed have had to be absent from work for four weeks or more due to an accident or illness. As a result, nearly half (47%) said they needed financial support to help them meet their mortgage payments.
Three out of five (61%) were absent from work for four weeks or more to take care of themselves, while 19% took care of their partner and the same number (19%) to take care of a family member. 17% took time off to take care of their children.
The research also found that nearly half (47%) of those surveyed, with a mortgage, currently have no financial mortgage protection, a policy that covers mortgage repayments in the event the insured is unable to work due to illness or an accident.
This is because 43% say they are concerned about making their monthly mortgage payments. One in seven (14%) admitted to regretting not having any mortgage protection. But two in five (40%) respondents admitted that they have no savings to draw on in case they need to cover their mortgage payments if they cannot work due to an accident or illness.
Improving mortgage protection is essential.
Rich Horner, MetLife’s Director of Personal Protection, said: “Despite a challenging economic outlook, in 2020 many people made their dream of homeownership a reality.
“The extension of the stamp duty holiday announced in the budget, along with the government guarantee on mortgages, means that the number of homeowners will increase even more. But, as ‘Generation Rent’ becomes ‘Generation Buy’, there is a greater need for financial protection and advisers have an invaluable role to play in providing unbiased advice and identifying protection gaps.”
“Most of us don’t want to think about getting sick or having an accident, but the reality is that it can happen to anyone. Some may think they will never need it, but ultimately, not having something in place, be it a protection or savings policy, to turn to can add to what is already a stressful time in case you become ill or have an accident that leaves you unable to work. And at a time when people need to recover, this worry and stress can increase healing time.”
“Our research found that more than half of homeowners and homeowners reported having mortgage protection, a figure much higher than the industry average. This raises an interesting question about what constitutes mortgage protection and suggests that more needs to be done to improve understanding and awareness of what financial protection is available and what is best suited to meet your needs. And as suppliers, we all have a role to play in that.”
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