Christmas is an expensive time of year and figures show that the average household spends an average of £3,750, 29% more than they usually would, with the average spend on Christmas presents alone hitting £548.
However, many households are already facing a tough Christmas with the cost of living seriously impacting their ability to spend this festive season.
One driving factor has been the increased cost of borrowing which, according to Barrows and Forrester, has increased by an average of £448 per month since last December.
In fact, their latest survey of 3,621 homeowners found that 29% had seen the cost of their mortgage increase due to being on a variable rate, while a further 10% were on a fixed rate, but facing an increase due to this fixed term expiring soon.
What’s more, 49% of those surveyed said they were already struggling with the cost of their mortgage due to this increase and the wider cost of living crisis. So much so that 64% also stated that they would be cutting back on their Christmas spend this year in order to get by.
The bad news? The Bank of England could be about to add to the financial woes of thousands of households by implementing another interest rate rise this December.
Should this happen, 73% of those surveyed by Barrows and Forrester said that it would put an even greater strain on their household finances.
James Forrester, Managing Director of Barrows and Forrester, commented: “With the nation already struggling with the worst cost of living crisis in decades, and stretched even thinner with the festive period fast approaching, the government looks set to gift them with the proverbial lump of coal in the form of a further interest rate hike.
"The average household on a variable rate mortgage has already seen the increase in their monthly mortgage repayment all but wipe out their average spend on Christmas presents since last December.
"So a further increase will come as a real blow to those who have already had to scale back on their Christmas plans due to the higher cost of living. Effectively, the government is cancelling Christmas for thousands of households, if not more and this January is going to look particularly bleak for many.
"If Rishi Sunak doesn’t wish to acquire the new status of government Grinch, he needs to start delivering both where economic growth is concerned.”
