Almost 800,000 households could lose their homes if they suffer a drop in income when mortgage deferrals and the ban on repossessions end, the latest research showed.
A report by the Social Market Foundation found that the pandemic has reduced the savings of many mortgage-holders, with more than one in ten owner-occupiers left without enough savings to cover a single month’s payments.
The research found that of the 770,000 households at risk of repossession, a quarter worked in the retail or manufacturing sectors, which have been badly affected during the Covid crisis.
The Financial Conduct Authority has banned home repossessions until 1 April and mortgage payment deferrals will end after 31 July.
The research found that 29 per cent of mortgage-holders had suffered a drop in household savings during the pandemic.
Those on lower incomes were more likely to report declining savings, with 46 per cent of those on incomes up to £20,000 reporting that savings had decreased.
Meanwhile, 14 per cent of the 2,000 households surveyed said they did not have enough savings to cover one month’s mortgage payment.
A further 30 per cent had enough cash stashed away to cover two months worth of payments.
Today’s report said the coronavirus pandemic should “provide a wake-up call for ministers on the need for stronger state support for homeowners at risk of eviction”.
The support should include a time-limited hardship grant for those suffering a temporary loss of income to help people keep up with mortgage payments, it said.