The claim

“3.9 million British families may be just one pay check away from losing the family home.”

Shelter press release, 11 April 2013

The background

Millions of Britons are at risk of losing their homes because they haven’t saved up enough for a rainy day, according to the housing charity, Shelter.

They’ve conducted a survey of 2,041 adults, which suggested that one in three workers couldn’t pay their rent or mortgage for more than a month if they lost their jobs.

Of them, the survey said, almost one in two said that if they lost their jobs this April and couldn’t get another one right away, they wouldn’t be able to pay their rent or mortgage at all.

Overall, it said, 3.9m British families “may be just one pay check away from losing the family home”.

“These figures paint an alarming picture of a nation where the buffer between having a home and potentially becoming homeless is a single pay check,” Campbell Robb, the chief executive of Shelter said.

“The depth of the financial pressure and insecurity felt by people across the country means that millions are living on the edge of a crisis, only secure in their homes for a matter of weeks. At the same time, support for people who have lost their homes is being stripped away – it’s easy to see why every fifteen minutes, another family in England finds themselves homeless.”

He goes on to say: “More and more people are coming to Shelter desperate for advice on how they can stay in their homes, and our services are straining to meet the demand.

“Anyone who can’t meet the payments on heir home should seek advice as a matter of urgency. Shelter can help advise anyone who is struggling to help prevent more people going through the devastation of losing their home.”

FactCheck gets down to the bricks and mortar of Shelter’s claim.

The analysis

There’s a key word in Shelter’s claim, and that’s “may”.

It’s a caveat which indicates that Shelter are outlining the worst case scenario, but one which doesn’t actually happen all that often.

When it comes to mortgages at least, the reality is that the majority of homeowners in arrears don’t tend to lose their homes.

The Council of Mortgage Lenders collects figures for how many people go into arrears of three months or more.

Between 2008 to 2012, in the fourth quarter of each year, the number of mortgages in arrears of three months or more has hovered between 215,000 to 275,800 mark.

During the same period the number of repossessions veered between 7,700 and 11,000. The Council doesn’t follow individual cases, but it’s fair to say that the general trend would be that during the last four or five years, the vast majority of mortgages in arrears do not end up with the homeowner losing their property. Around four per cent do.

The other issue is that, startling though Shelter’s figures may sound, there is nothing historical to compare them with.

Via YouGov, respondents were asked: “Please imagine that you were to lose your job in April 2013 and you were NOT able to secure another one right away…Approximately how long, if at all, do you think you could afford to pay your rent or mortgage from your savings for?”

The results said that 18 per cent said they wouldn’t be able to afford any rent or mortgage at all; 35 per cent said they could pay for up to a month; 43 per cent of people with children said they could pay for up to a month, and 23 per cent with children said they couldn’t pay at all.

Shelter then took the Office for National Statistics’ figures for the total adult population of Great Britain, 47.8m, to work out their figures.

Nonetheless, as respondents haven’t been asked this question before, for all we know, the situation may have been worse before.

It could be that, as Shelter claims, “as government cuts kick in and the squeeze on family budgets means saving becomes ever harder”, people are ending up with smaller rainy day funds should they find themselves unemployed.

On the other hand, it could be that during an economic boom, people are confident so they are prepared to take greater risks with whatever’s left in the kitty.

The Office for National Statistics does collect some information on household’s savings.

Savings are presented as household net financial wealth; the column on the left begins with people in debt of more than £5,000, and ends up with those with £100,000 worth of savings.

But the figures suggest that the amount of money people were saving was broadly consistent for most groups in 2006/08 compared with 2008/10.

There was a slight rise in the number of people with more than £5,000 debt, and a decline in the number of people with £0 to £500 worth of savings, but from the boom to the first recession, not a massive change in savings.

The verdict

It’s worth pointing out that Shelter is a campaigning organisation, not a think tank and certainly not a government department, and these figures are based on surveys as opposed to statistical analysis.

But what they’ve done is present a worst case scenario of what may be technically possible, but is not that likely.

We did ask for a breakdown of how many people in their survey were homeowners and how many rented and so on. Of those considered “statistically significant”, 1,175 had mortgages, and 609 rented.

So the bulk of who they’ve surveyed are unlikely to be that badly affected.

It’s also a pretty large extrapolation to convert that figure to millions. And then an even larger assumption to say that 3.9m families who lose their jobs will all do so at the same time and then lose their homes.

Their breakdown does reveal, however, that uncertainty is greater among those who rent, whether from a private landlord, a local authority or housing association, or from those who part rent and part buy. Around a quarter said they wouldn’t be able to afford any more rent.

Statistics aside, it’s hard to argue that to be in that position is worrying enough for anyone.