London worst in UK for mortgage arrears
Homeowners living in London are more likely to struggle with mortgage payments than householders across the UK, a report published by debt charity StepChange claims.
Of 15,000 clients surveyed, 37.7% of those living London were in arrears by an average of £4,177, compared to 31.8% of those living across the rest of the UK, who were in arrears by an average of £3,108.
Mike O’Connor, chief executive of StepChange, said: “Debt can affect anyone at any time, regardless of their income, and it can bring with it severe consequences for individuals and their families.
“The problem is particularly serious in London, where rising living costs and sluggish wage and cuts to benefits have combined to leave people financially vulnerable and with little hope of building up savings or owning their own home. The streets of London are more likely to be paved with debt than with gold.”
Figures released in its London in the Red report show clients helped by the charity in the capital also owe more on credit cards, loans and other credit debts, have higher arrears on essential bills and face a greater struggle to make ends meet.
Londoners are significantly overrepresented among those contacting the charity.
Of the 550,000 people helped by the charity last year around one in five were from London, despite only one in seven people in the UK living in the city.
The study also shows that London clients on average are £66 short of being able to afford their essential bills and credit commitments each month. Nationally, StepChange Debt Charity clients are £15 short on average.
Real term cuts to benefits and a fall in the real term value of wages since the recession have coincided with a rise in utility costs and soaring private sector rental and house prices, according to the charity.
The charity estimates debt costs the London economy £1.4bn, including extra costs from housing, unemployment, mental health and relationship breakdown.
O’Connor added: “The new Mayor of London has already spoken of the housing crisis, but the problem goes much deeper than that. He must now use his convening powers to orchestrate effective action to address the debt problem gripping our capital city.
“With firm action to raise awareness of savings options, affordable credit and debt advice, hundreds of thousands of people could get the help they need to recover financially and avoid the devastation of severe problem debt.”