A survey of 2,000 homeowners by online mortgage broker Tussle has found that 38% of homeowners are worried about their mortgage payments given the current rise in living expenses.
Furthermore, 20% are not sure how they will meet their next payment.
Currently, inflation is at a 40-year high, while utilities have also seen major price hikes with the energy price cap raised by 54% in April, and this is forecasted to be extended again in October as the wholesale cost of energy increases. Alongside this, the Bank of England has raised the base rate of interest to 1%, which has added an average of £1,313,16 annually to mortgages since December 2021.
Despite a hard economic backdrop, the housing market has defied expectations during the pandemic, with the average price of a home rising by 18.2% in two years.
In the face of rising costs, Trussle found that homeowners were largely unaware of potential options to help them weather financial challenges. Only 10% have investigated when they are able to remortgage, which would give them greater security in the face of rising interest rates. Even the basics of financial planning appear to have been overlooked, with just a third of homeowners having evaluated their overall expenditure.
Amanda Aumonier, head of mortgage operations at Trussle, said: “Homeowners are facing a perfect storm of challenges that is pushing their finances to breaking point. This has left many feeling deeply worried as to how they can keep paying their monthly bills and make ends meet.
“However, we would urge people not to simply put their heads in the sand when it comes to their household finances. There are a range of measures from remortgaging to locking in a long term mortgage deal that can help give you greater stability and certainty.”