Mortgage holders in London are more than twice as likely to default on their payments within six months as mortgage holders in the rest of the UK, according to new research.
Data from mortgage repayment platform Eligible AI shows that 9% of Londoners with a mortgage are expected to default on their payments within the next six months. This equates to 4% in the UK as a whole.
This means more than 150,000 Londoners will fall into default on their payments in the coming months.
Additionally, 39% of Londoners say mortgage payments are a significant source of their financial stress, alongside rising costs of living and burdensome utility bills.
The survey also found that 12% of mortgage holders in London have no contact with their lender and do not understand the terms of their mortgage.
Zahra Hassan, co-founder of Eligible, said: “The fundamental problem is that a mortgage is a financial product that customers only use once every three to five years. This is because they do not use their mortgage regularly and , which means you don’t know what all the options are.
“In a broader sense, rising interest rates, combined with rising energy and living costs, increase vulnerability to default. But the main factors that push someone from financial strain to actual default are There is a lack of awareness of the range of options banks could have offered to temporarily relieve the financial burden of mortgages, which are financial obligations.
The findings come as many financial institutions have raised mortgage rates in recent months. Coventry Building Society is the latest company to undertake this initiative, following HSBC and Santander. However, Halifax bucked this trend by lowering interest rates.