A financial regulator warned that half of those on interest-only mortgages will not have enough money to pay their loans back.
A major report published by the FCA today reveals many of us may never be able to pay off the mortgages of homes we are already in.
New rules on mortgage lending that could prove problematic for those trying to get on the property ladder are due to be announced today.
Shelter estimates that almost one million people took out a payday loan over the last 12 months to help them cover their mortgage or rent.
Mandy Buxton was one of them, she told ITV Daybreak that she now faces eviction.
A survey carried out for Shelter has shown that millions of Britons are finding it difficult to keep up with rent and mortgage payments.
Despite this, figures from the Council of Mortgage Lenders (CML) show that the number of home repossessions have been much lower than expected.
The CML said that the number of home repossessions has fallen to its lowest level since 2007 in the third quarter of this year.
- Shelter estimates almost one million people took out a payday loan over the last 12 months to help them cover their mortgage or rent
- Based on their figures it is estimated that around 979,000 had taken out a high-interest payday loan for this purpose
- The charity said the number of people constantly struggling to pay their rent or mortgage had increased by 44% over the past year - 7.8 million Britons
- 4% of rent or mortgage payers said they had fallen behind with their payments, an estimated 1.4 million people at a national level
- Nearly 10% of those surveyed said they used an unauthorised overdraft to help them cover costs, and one in ten of these people said they did so every month
- More than a million homeowners saw their mortgage costs increase in recent months after several lenders raised their standard variable rates
– Campbell Robb, Shelter's Chief Executive
It's shocking to think that so many families will be starting the New Year with a huge weight hanging over them, trapped in a daily struggle to keep their home.
Payday loans may seem like a quick fix, but the huge interest charges mean things can quickly spiral out of control.
It's vital that anyone who's having difficulty paying their rent or mortgage gets advice now.
Don't wait until things reach breaking point later in the year - it could leave your family's home at risk.
Nearly one and a half million people in Britain are falling behind with their rent or mortgage payments, new research from Shelter shows today.
The survey of more than 4,000 British adults found that the number of people constantly struggling to pay their rent or mortgage has increased by more than 40 per cent over the past year.
The charity warned that nearly eight million people are now facing a monthly battle to pay their rent or mortgage.
HSBC said it increased lending to UK mortgage borrowers by more than a fifth this year, while lending to first-time buyers has gone up by a third.
The bank said it approved £5.6 billion in loans to mortgage borrowers between January and September 2012, representing a 22 per cent increase on last year.
Its first-time buyer lending has gone up by 33 per cent compared with 2011, with loans worth £ 4 billion approved so far this year.
Overall, the bank said it has approved £38.3 billion in new loans to UK businesses and mortgage borrowers in the first nine months of 2012, an 11 per cent increase on the same period in 2011.
– Campbell Robb, chief executive of Shelter
We very much welcome the role this review will play in protecting families from taking on debts that are simply not sustainable.
At Shelter we know only too well the damage that reckless lending can cause and the lives that are ripped apart by the pain of repossession.
The biggest barrier to home ownership in this country is not regulation of the mortgage market, but the sky high cost of housing due to decades of under-investment in building new homes.
– Paul Smee, director-general of the Council of Mortgage Lenders
The regulatory changes have already been widely anticipated and so are unlikely to create any significant additional or unexpected impacts.
Property expert Kate Faulkner has told Daybreak that the move to toughen up on mortgage lending is a sensible one.
She said: "They don't want to compound the problem by giving more people interest-only mortgages with no facility to pay it off."