Recent Release | 06 Mar 2023
At Risk Mortgage Holders
Economic Consulting Team
Oxford Economics
With most mortgage holders having switched to fixed-term contracts, higher mortgage rates will not impact all mortgage holders equally. Homeowners that are required to refinance their mortgages and those on variable-rate mortgages during this period face a sharp rise in mortgage cost compared to those who continue to be within their fixed term.
According to our forecast, by the end of 2023 mortgage costs will exceed 25% of net income for more than a quarter of mortgage owner occupiers. In common with FCA parlance, we define these households as ‘at risk’ of default and our analysis reveals that by the end of 2023, we expect there to be just over 2 million ‘at risk’ households, which would mark an 18-month increase of approximately 425,000.
For many of those refinancing, the financial shock will be unpleasant but manageable. By combining data from the Financial Barometer database the study incorporates information on other aspects of this ‘at risk’ group’s financial position. Focusing in on the vulnerable cohort, nearly one-third (650,000) have inadequate cash savings and around one-in-six (347,000) combine this with unsustainable spending.
About the team
Our Economic Consulting team are world leaders in quantitative economic analysis, working with clients around the globe and across sectors to build models, forecast markets and evaluate interventions using state-of-the art techniques. Lead consultants on this project were:
Henry Worthington
Director, Economic Consulting
Ben Skelton
Lead Econometrician, Economic Consulting
You might be interested in
Champions needed: Building Digital trust in a dangerous world
Recent research from Oxford Economics in collaboration with SGTech shows that digital trust, once considered the purview of IT and cybersecurity, now stretches beyond those traditional roles to all parts of an organization, requiring a highly trained workforce that has both technical and more general digital business skills.
Find Out More
Shell’s Socioeconomic Impact in the Netherlands
Economic impact study quantifying Shell's economic footprint in the Netherlands. The study also considers Shells impact on Dutch society, impacts of its R&D activities, and its contribution to energy security.
Find Out More
The Economic Contribution of International Spirits in Hong Kong
This report presents an assessment of international spirits’ contribution to the Hong Kong economy. It explores how rebalancing the tax structure on spirits towards a specific tax system could potentially provide a more effective tax policy instrument and enable Hong Kong to benefit further from the sector’s economic contribution.
Find Out More
The economic contribution of the US nuclear power industry
This report estimates the national economic contribution of the US nuclear power industry, the state-level contributions, and the local contribution in counties with nuclear power plants. It also discusses nuclear power and air pollution, land use, worker safety, and waste.
Find Out More