Nearly 800,000 households across the UK could be at risk of losing their home if they suffer a loss of income, according to new analysis.

The Social Market Foundation (SMF) said that of the 770,000 it calculates may be at risk of repossession, a quarter (26%) work in retail or manufacturing, sectors badly hit by the coronavirus pandemic.

The think-tank’s research funded by the Building Societies Association (BSA) suggests more than one in 10 owner-occupiers do not have enough savings to cover a single month's mortgage payment.

A ban on home repossessions has been put in place as part of Covid-19 support measures and borrowers have also been able to take mortgage payment holidays.

Opinium polling of 2,000 mortgage-holders commissioned for the SMF found 29 per cent had seen their household savings decrease during the pandemic.

Nearly half (46%) of mortgage-holders on incomes up to £20,000 said they have seen their savings decline.

The SMF suggested that a time-limited hardship grant could protect households from building up additional financial burdens.

Research director, Scott Corfe, said: "Close to 800,000 home-owners could be at risk of losing their home during these turbulent economic times."

Paul Broadhead, head of mortgages and housing at the BSA, hopes that the findings in the independent report will stimulate debate and that a range of flexible and compassionate options can be found to create positive futures for those whose prospects may currently feel pretty bleak.

He said: "With the growth in wealth and income inequality as a result of the Covid-19 pandemic, it's now more important than ever to look at all possible options that could help home-owners who are struggling to meet their mortgage payments beyond lender forbearance.

"There isn't one single solution that will support all those in need. Stakeholders, including [UK] Government and lenders, need to work together to ensure that home-owners and families, whether they're dealing with temporary or longer lasting financial difficulties, have the best chance of overcoming their difficulties and enjoy a home which is financially sustainable.

Is remortgaging a solution?

Remortgaging is the process of changing your initial mortgage supplier and swapping to another mortgage product from a different provider, and there are many benefits for doing so.

Ross Counsell, Director of GoodMove, said: “Remortgaging is something which many homeowners will avoid simply out of fear. But, the remortgage process can be extremely important as it’s one of the best ways homeowners are able to save money.

“A mortgage tends to be the biggest investment in a person’s life, so it’s important to know your options and be aware of any possible remortgage savings. Even if you think this doesn’t apply to you, it’s important to not leave things until the last minute especially in this uncertain climate.”

Experts at GoodMove share everything you need to know about the remortgage process.

When is it a good idea to remortgage?

Remortgaging is usually done to save money on monthly payments as you can compare the different options available to you.

Here are the main reasons why you might look to remortgage:

If you are considering remortgaging to consolidate debt, be careful and speak to a debt organisation like Citizens Advice, StepChange or Christians Against Poverty to make sure you’re not putting yourself at risk.

How do I remortgage?

Get Advice

Don’t be afraid to get advice from a qualified financial expert. Doing so not only means that you’ll get the very best options, but if your mortgage or advice turns out to be unsuitable or something goes wrong for some reason, you can complain to the Financial Ombudsman Service.

Check your credit score

When remortgaging your home, you’ll go through pretty much the same application process you had to pass for your current home including all the credit checks. To avoid any disappointment it might be worth checking your credit score before reapplying – which you can do for free through websites like Clearscore and Experian. 

Check for hidden costs

Leaving your mortgage and switching before the official end of your deal usually involves a fee, called an early repayment charge. Additionally, there might be the usual legal, valuation, and administration costs involved that you should consider.

Financial help available in Scotland

How to find the best remortgage deals

Start searching early

Remortgaging should not be taken lightly and doing plenty of research and finding a new provider well before your switching date is crucial. If you are considering remortgaging your home, start searching for options as early as possible.

Get your timing right

Most mortgage lenders will allow you to secure a rate up to three months in advance – but you won’t have to start actually paying the mortgage right away.

For instance, if your current mortgage deal ends in April, but you find a great deal in January, you can lock in the better rate and continue paying off your current mortgage until your switching date, and avoid paying any fees to leave your deal early.

Ask your current provider if they can match your new deal

Once you know the sort of deals out there and what to expect, it’s always worth reaching out to your current mortgage provider, as they may be able to match the best remortgage deal you can find. Ultimately, this can save you plenty of time and money, as you won’t have to actually go through the full remortgaging process and switch providers.

For more information on the remortgage process, visit the goodmoves website here.