(Adds comments from watchdog, debt charity)
By Huw Jones
LONDON, March 10 (Reuters) - Britain's financial
watchdog said on Friday it expects the number of mortgage
borrowers struggling to keep up with payments to rise at a much
slower pace in the next 12 months than previously forecast as
interest rate hikes will be more modest.
The Financial Conduct Authority (FCA) said that in addition
to households already behind on payments, 356,000 mortgage
borrowers could face payment difficulties by the end of June
2024, but that is far fewer than a previous FCA estimate of
570,000.
Borrowers aged 18 to 24, and those living in London and the
south east of England were most affected, the watchdog said.
Those rolling off a fixed rate mortgage deal could end up
paying an additional 340 pounds ($404.84) a month on average,
the FCA said.
It was vital that lenders proactively offer support to
people worried about repayments, the Money Advice Trust, a debt
charity, said.
The slower increase in numbers is due to markets expecting
the Bank of England not to raise interest rates as high as
previously expected, the FCA said. Easing energy prices and a
resilient jobs market are also helping.
About 200,00 borrowers had a payment shortfall as of June
2022.
The FCA has been putting pressure on banks to help
customers, and lenders proactively contacted customers a total
of 16.5 million times in 2022, with this set to increase to 20.5
million over the next year, it said.
Nikhil Rathi, FCA chief executive, told parliament on
Wednesday that the watchdog had intervened in over 30 firms that
had not treated borrowers in difficulty fairly.
"The leadership of banks understand their reputations are at
stake if they don't handle things appropriately in coming
months," Rathi said.
The FCA also published final guidance to banks on helping
customers in difficulties, including options such as extending
the term of a mortgage or making reduced monthly payments for a
temporary period.
"This FCA initiative is a thin sandwich - lots of bread but
not much meat.? It is primarily about clarifying guidance, which
is needed, rather than any new measures," said Martin Lewis,
founder of MoneySavingExpert.com.
($1 = 0.8398 pounds)
(Reporting by Huw Jones; Editing by Susan Fenton and Shounak
Dasgupta)
Messaging: huw.jones.thomsonreuters.com@reuters.net))
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