Mortgage and rent payments ‘difficult’ for almost 40 per cent of Brits
Some 38 per cent of Brits have confessed to finding it difficult to afford their rent or mortgage payments over the past month, as the cost of living crisis continues to wreak havoc on the public’s personal finances.
This figure was around 29 per cent in early August 2022, new figures from the ONS show, with a further 61 per cent of people now saying that housing costs are one of the most important issues facing the UK today.
When asked about what people are doing because of the increases in the cost of living, over two-thirds said they were spending less on non-essentials, and 51 per cent said they were using less fuel such as gas or electricity in their homes.
While inflation fell unexpectedly to 7.9 per cent this drop is yet to be felt by the majority of consumers.
Over the summer the housing market was also gravely impacted by the Bank of England’s decision to hike interest rates 0.5 per cent for the thirteenth consecutive time in a row.
The move sent mortgage lenders into a frenzy, with rates reaching their highest levels in 15 years at 6.66 per cent.
Earlier this month, the Bank of England chose to raise rates again by 0.25 per cent, however lenders seemed less fazed by the news with many cutting the prices of their deals this week.
However, Nationwide slashed the price of its fixed rate mortgage deal by 0.55 percentage points. TSB also revealed reductions of 0.4 points on some of its deals.
Prospective buyers are still cautious about the outlook for the market, with the average buyer saving an extra £11,500 more for their deposit, research from Mortgage Advice Bureau showed.
“Economic volatility has seen prospective buyers battle high inflation, pushing prices up and limiting the amount they can save,” Ben Thompson, deputy chief at Mortgage Advice Bureau, said.
“Meanwhile, higher interest rates have lowered the amount they can borrow, meaning bigger deposits are needed. This has led to many prospective buyers having to put more away than they had initially planned.”
This week, it was also reported that property professionals’ expectations that rents will rise in the next few months are at the strongest levels seen so far this century, according the findings from the Royal Institution of Chartered Surveyors (RICS) indicate.