More than Half of UK Mortgage Holders Struggling with Mental Health as Cost of Living Crisis Hits Home

New survey data from Dye & Durham reveals extent of issue for homeowners

• 56% of UK mortgage holders say the cost-of-living crisis is affecting their mental health
• 30% worried they will fail to make mortgage repayments within the next year
• One third (36%) could not afford to continue paying their mortgage for more than two months if a job loss affected the main earner in their household
• Two thirds (66%) are worried their offspring will be unable to get on the property ladder
• More than three-quarters believe the UK is in a recessionary-phase: 42% believe the nation is in a recession now while 35% say we are about to enter one
• Digitisation is key for legal professionals in the property space amidst slowing transaction volumes

According to a new survey of 2,000 UK homeowners who pay a mortgage, conducted by independent market research firm Danebury Research on behalf of Dye & Durham, the ongoing cost of living crisis is affecting the mental health of more than half (56%) of UK mortgage holders who have genuine concerns over their financial situation and that of their families.

Nearly a third (30%) say they are worried they will fail to make mortgage repayments within the next year, with those aged 18-24 expressing particular concern (42%). In addition, more than a third (36%) said they could only afford to continue paying their mortgage for two months if a job loss affected the main breadwinner, meaning repossessions could become a rising risk for the UK’s property market. And with one in eight (12%) UK homeowners – and nearly one in five (19%) Londoners – expecting to delay selling or buying a home this year, legal professionals that rely on property transactions to drive revenue will need to take a closer look at their operations and make adjustments to better adapt to volatile market conditions and save money.

“The effects of high interest rates, energy bills and the increased cost of living overall cannot be underestimated. Our survey data shows Britons are extremely concerned about both their short- and long-term future and have reduced spending, raided savings and are delaying major purchases,” says Martha Vallance, Chief Operating Officer for Dye & Durham. “For legal professionals that rely on property transactions this is likely to have a significant effect for the duration of 2023 and beyond. Now is the time to start evaluating technologies that can help modernise their businesses and help them save money by reducing unnecessary costs.”

Economic uncertainty is weighing on the minds of property owners with 69% concerned about the financial future for themselves and their family. Two thirds (66%) say they are worried their children or grandchildren will be unable to get on the property ladder due to affordability.

Survey respondents confirmed they (43%) have taken to selling personal items to better manage household budgets and more than half (55%) have made personal sacrifices so their family and children are not impacted – for example by eating less, or not buying clothing or shoes for themselves. Already to date, 25% of respondents have had to delve into savings to put cash towards day-to-day expenses such as food or heating.

Other findings of note from the survey included:
•  More than a third (36%) of respondents expect it will take significantly longer to pay off their mortgage than originally anticipated
•  One in three (35%) expect to delay home renovation or improvement projects
•  Almost one fifth (19%) expect they will need to delay retirement plans – increasing to nearly a quarter (24%) of 45-54 year olds
•  Almost half (46%) of people in Yorkshire & The Humber said they could comfortably afford to continue paying their mortgage for just two months or less, if there was a change of circumstances for the main income earner, compared to 22% of Londoners who said the same
•  To help manage monthly outgoings, three in five (60%) homeowners have cut-back on takeaways or meals out – including two thirds (66%) of those aged 55-64. More than half (52%) say they have reduced clothes shopping
•  39% of Londoners have returned to the office to instead of work-from-home, to save costs.

Paul Clarke, UK Product Lead, Dye & Durham adds: “For those concerned about making mortgage payments, seek advice from a mortgage advisor or your lender as help is available. It may be possible to secure a mortgage holiday or switch to interest-only payments for a temporary period. Selling a property can take a minimum of two-three months from sale agreed to completion, so for those considering downsizing to minimise mortgage commitments, don’t delay consulting an estate agent or legal conveyancer for advice.”

Property and legal professionals including solicitors, lawyers, legal firms, estate agents and mortgage brokers saw record numbers of property transactions following the Covid-19 Pandemic. While this had a positive impact on the bottom line of many sector professionals, the increased volume of sales meant broader strategic plans were placed on hold. With a slower and more challenging market expected throughout 2023, and many consumers adjusting their plans due to the cost of living constraints, it presents a chance for industry professionals to implement plans to improve operational efficiency.

“With transaction volumes likely to be reduced this year due to consumer concerns over the cost of living crisis, professionals now have the opportunity to take a closer look at their operations and evaluate ways to improve efficiency for both their businesses and their customers,” explains Clarke. “By improving their processes and workflows now, to support a more agile approach to transactions and practice management, it will provide a real advantage once the market bounces back to previous levels.”

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