80% of homeowners ‘concerned’ about impact of rising rates


This fear is felt most strongly among younger homeowners, with 88% of 25–34-year-olds concerned about increasing rates

The specialist lender’s survey finds that 80% of homeowners reported being “concerned” about the impact of increasing rates, with 37% being “extremely concerned” and 43% being “somewhat concerned”.

This fear is felt most strongly among younger homeowners, with 88% of 25–34-year-olds concerned about increasing rates.

The study says, with renting cheaper than a FTB mortgage in some areas of the UK for the first time since 2010, it is not a surprise that the younger generation are worried about the affordability challenges within the market.

Nearly 800,000 fixed-rate deals are due to end in the second half of this year, as per UK Finance, with nearly 1.6 million deals due to end in 2024.

Many of the homebuying market’s core two- and five-year deals were signed at sub-2% mortgage rates, but both of these terms now top 6%.

Homeowners expect their mortgages to increase by £617.45 per month on average, according to The Mortgage Lender’s study.

It says, this is a sharp contrast to the same question asked in November last year, when the average expected increase was over £400 lower at £176.84.

The survey says that 28% of homeowners are speaking to their mortgage lender, and a further 25% are speaking to their mortgage broker prior to their renewal, to find the best possible deals.

The Bank of England’s Monetary Policy Committee is expected to hike rates by 25 bps from its present level of 5.25% after its meeting on Thursday.

This would be the 15th consecutive rate hike, taking it to the highest level for at least 15 years.

However, many economists now predict the base rate will stay at 5.5% until the end of the year, down from a predicted peak of 5.75% earlier this summer.

This comes amid the Bank’s fight against inflation, which dropped to 6.8% in the year to July from 7.9% in June, but still remains nearly three-and-a-half times above its 2% target.

The Mortgage Lender chief commercial officer Steve Griffiths says, with rates increasing steadily over the last year, homeowners have been living with this new reality for a while now.

He added that nevertheless, as many mortgages start coming up for renewal, the affordability challenges within the market are starting to impact more mortgage borrowers.

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