Five million UK families ‘face mortgage rising by £5,100 a year by end of 2024’
More than five million families could see their annual mortgage payments rise by an average of £5,100 between now and the end of 2024, heaping fresh pain on households already struggling with higher food and energy bills.
The increase adds up to a £26bn mortgage rise for homeowners, according to the analysis by the Resolution Foundation thinktank which said nearly a fifth of British households would have to spend more on their housing costs by the end of 2024.
The thinktank said that approximately £1,200 of that £5,100 figure was due to expectations that interest rates would rise more quickly than previously thought because of the upheaval in the financial markets caused by the government’s disastrous mini-budget.
“Between now and the next election, Britain is on track for a £26bn mortgage hike,” said Lindsay Judge, the thinktank’s research director.
Judge said that almost half of borrowers were on course to see their family budgets fall by at least 5% due to higher housing costs, which meant the “living standards pain from rising interest rates will be widespread”.
“Households across Britain are currently living through an inflation-driven cost of living crisis as pay packets shrink and energy bills rise,” she said.
“The government has responded with policies such as the welcome energy price guarantee. But the Bank of England is responding too by raising interest rates, which will benefit savers but cause a fresh living standards crunch for mortgaged households.”
While interest rates started the year at 0.25% the Bank of England is expected to push them up to more than 5% by early next year. After years of ultra-low borrowing costs this new landscape has sent shockwaves through the housing market with experts predicting
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