Homeowners are increasingly concerned about the economic climate and its impact on their household finances, according to research by Trussle.
A survey of 2,000 homeowners by the online mortgage broker found that 2 in 5 homeowners (38%) are worried about their mortgage payments given the current rise in living costs, while 1 in 5 ( 20%) does not know how he will cope with his next payment.
Last week, the Office for National Statistics (ONS) has announced that inflation soared to 9.1% in May, raising the cost of socializing and clothing up to the weekly grocery store.
Next to that, the Bank of England (BoE) raised the key rate by 25 basis points to 1.25%, marking the fifth base rate hike since December 2021 after a decade of historic lows.
Utilities also saw significant price increases, with the energy price cap raised by 54% in April. Earlier this month, the Monetary Policy Committee said it expected inflation to top 9% in the coming months and to rise slightly above 11% in October. .
The October increase reflects the expected rise in household energy prices following a potential further large increase in Ofgem’s price cap.
Despite tough economic times, Trussle says the housing market has defied expectations during the pandemic, with the average price of a home rising 18.2% in two years.
However, the online mortgage broker explains that more recently, lenders and industry experts have signaled that the boom may be about to end as affordability issues catch up with the market.
Trussle’s research found homeowners were largely unaware of potential options to help them through financial hardship.
Only 10% investigated the possibility of re-mortgaging, which would give them greater security in the face of rising interest rates, while only a third of homeowners assessed their overall spending.
Amanda Aumonier, Head of Mortgage Operations at Trussle, says, “Homeowners are facing a perfect storm of challenges that are pushing their finances to breaking point. This has left many people deeply worried about how they can continue to pay their monthly bills and make ends meet.