• The mortgage crisis in the UK has dominated the media conversation in recent months due to rising interest rates, potentially impacting over 2 million mortgage holders and causing economic slowdown fears.
  • Our media analysis found that banks’ reactions to the crisis have been portrayed as reactive rather than proactive, with institutions like HSBC, Nationwide and Barclays facing media scrutiny for their response strategies, potentially causing reputational hazards and affecting public trust.
  • We also found that the media’s portrayal of individual suffering due to the crisis fueled mistrust in the banking sector, while financial journalist Martin Lewis was influential in the debate for his plain language and practical advice, providing a model for how financial firms could evolve their PR strategies.

View a one-page infographic summary of the analysis

In the last few months, one particular facet of the current inflation debate has been dominating UK media headlines: the mortgage crisis.

This media conversation has cast a critical light on the actions of the banks and the government, underscoring the urgent need for effective measures to support struggling homeowners. At the same time, the conversation has been peppered with scepticism about the effectiveness of proposed solutions, leading to a public outcry for more tangible, comprehensive relief initiatives from both the financial institutions and the state.

To see how the debate has unfolded, we analysed 712 English-language articles published in top-tier UK media outlets during the last three months. Here’s what we found:

1. Rising interest rates ignited fear of a historic crunch

Rising interest rates were the largest topic in the media debate around the mortgage crisis because they directly led to an added financial burden on homeowners and exacerbated the cost of living crisis, thus causing widespread concern and financial distress.

Notably, journalists brought attention to the Bank of England’s unexpected decision to increase interest rates by half a percentage point, despite the potential impact on those with mortgages.

In particular, the media has pointed out the potential “mortgage bomb” that may cause significant financial distress for over 2 million UK mortgage holders. The rising interest rates have been depicted as a daunting challenge for those seeking to refinance their mortgages, leading to the expectation of sharp increases in monthly bills.

Journalists also put considerable emphasis on the ‘historic mortgage crunch,’ framing it as an impending crisis. The significant rise in two-year fixed-rate mortgage cost, depicted as the highest since December, has been cited as a sign of the tough times ahead for UK homeowners. Consequently, this situation has been perceived as a daunting test for Prime Minister Rishi Sunak, who is facing pressure to fulfil his pledge of halving inflation to around 5%.

2. Reactive comms and inconsistencies created reputational hazards

The UK media has depicted a nuanced picture of the actions taken by banks. Journalists noted the varying reactions and strategies employed by banking giants such as HSBC, Nationwide, Lloyds, Halifax, TSB and Barclays in response to the ongoing crisis.

The media portrayed the efforts of the banks to address the crisis as reactive rather than proactive. For example, many publications focused on the multiple rate adjustments by HSBC in response to demand surges, reflecting a sense of unpredictability and making HSBC the most influential organisation in terms of media impact after the financial information company Moneyfacts.

We determine an organisation’s media impact in the context of a topic by looking at its media influence score calculated in terms of coverage by high-profile media outlets, topic relevancy score measuring its contextual relevance, and media visibility as measured by the number of mentions.

The way banks communicated their policies and overall responses became another critical focal point in the media debate. For example, HSBC pointed to their desire to meet customer service commitments despite the operational strain, while Nationwide justified its rate hikes by stressing the need for price sustainability. In the meantime, Barclays warned of a “huge income shock” to homeowners and renters due to rate rises, a representation of the sector’s struggle to navigate the turbulence.

The transparency in these communications was presented positively in several publications, offering some relief to consumers seeking explanations for the sudden shifts.

However, the overall PR strategy of banks was cast into doubt by journalists who pointed out discrepancies. While banks were seen as responsive to the UK Chancellor’s request for leniency during a crisis meeting, their prior actions indicated a less accommodating stance. For instance, Lloyds had warned of a rise in mortgage arrears before the crisis meeting. The media highlighted these inconsistencies, suggesting that banks’ actions were at odds with their public rhetoric.

3. Repossessions delay won some PR points

One of the top-trending pieces of news in the debate was the agreement between mortgage lenders and the UK Chancellor to provide a 12-month break before repossession proceedings begin. Publications focused on the decisions made by banking leaders like NatWest, Lloyds, Barclays and Virgin Money, emphasising their promise to protect consumers’ credit scores.

Some journalists observed the banks’ supportive communication – for instance, HSBC UK CEO, Ian Stuart, was quoted highlighting the bank’s commitment to helping customers navigate financial difficulties. The media portrayed these steps as part of the banks’ PR strategies to maintain their reputation amidst the crisis.

However, the media debate also featured some criticisms of the banks’ actions. Some outlets stressed the absence of support for renters and the lack of mandatory implementation across all banks, potentially leaving some homeowners without support. Several publications portrayed these gaps as weaknesses in the banks’ strategy, suggesting that their measures might be seen as selective or insufficient.

4. Reports on individual suffering fueled mistrust in banking

Numerous reports featured personal stories putting a human face on the financial turmoil. Journalists noted the grim experiences of people, most notably young couples and families, who were more heavily affected due to having repaid less of their often substantial mortgages. They underscored the emotional toll on these individuals who are feeling “absolutely terrified” and experiencing “ruined lives“.

This media narrative has substantial implications for the reputation of financial services firms, as they were indirectly painted as contributors to this crisis. The image of banks as large, impersonal entities that are more concerned about their bottom line than the welfare of their customers was reinforced by these reports.

Moreover, this narrative further exacerbates the public’s perception of the banking sector as a whole. By painting them as the silent contributors to the ‘mortgage bomb’, the media indirectly blamed these institutions for the hardships faced by millions. This sustained negative portrayal perpetuated the damaging reputation that banks have carried since their role in the 2008 crisis, where they were perceived to prioritise profit over people. As a result, the industry is faced with the ongoing challenge of rebuilding public trust amid a landscape punctuated by economic turmoil and individual suffering.

5. Firms can learn from Martin Lewis’ straight-talking approach

We found that the most influential spokesperson in the debate was financial journalist Martin Lewis, founder of the website MoneySavingExpert.com and often dubbed “the money-saving expert”.

In the midst of the mortgage crisis, Martin Lewis‘ communication strategy stood as a guiding beacon for homeowners, highlighting a proactive approach to dealing with the rising costs. His approach illustrated the power of plain language, practical advice and personal engagement in financial communications.

Lewis successfully broke down complex economic concepts into digestible advice, making it accessible to his wide audience. His phrase “overpaying is effectively a tax-free saving at the mortgage rate”, which was quoted in numerous publications, cut through economic jargon and enabled homeowners to understand the benefits of this strategy.

These are valuable lessons for financial services firms as they seek to evolve their PR strategies in response to crises. Financial firms can emulate this strategy by focusing on communicating complex financial information in a straightforward, understandable manner. Transparent, regular and honest communication about the situation, accompanied by practical advice, can demonstrate that the firm prioritises the well-being of its customers.

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