"We’ve seen interest rates rise consistently now for over a year and this will have put inevitable pressure on many homeowners who will have seen the cost of their mortgage increase as a result"
A steadily rising base rate has seen the majority of UK homeowners have seen the monthly cost of their mortgage increase by hundreds of pounds a month, with 30% struggling to cover the increased cost of borrowing.
A new survey from estate and lettings agent, Barrows and Forrester, of 2,304 current homeowners with a mortgage, found that 57% have seen the monthly cost of their mortgage increase since interest rates first started to climb in December 2021.
For most, this increase has only been marginal, with 54% stating it had increased by less than £100 a month. However, 28% have seen an increase of between £100 to £250 per month, while 18% have been hit with an increase of over £250 per month.
At a time when household finances are already stretched thin, it’s perhaps surprising that just 30% stated that they are now struggling to cover the increased cost of their mortgage, albeit this remains a sizeable number of homeowners now in financial turmoil.
Despite this, just one in ten stated that they were considering selling their home due to the higher cost of their monthly mortgage repayments.
However, 30% again stated that they were concerned that the value of their home may have reduced in the current market.
James Forrester, Managing Director of Barrows and Forrester, commented: “We’ve seen interest rates rise consistently now for over a year and this will have put inevitable pressure on many homeowners who will have seen the cost of their mortgage increase as a result.
"The silver lining is that only a relatively small proportion are now struggling with the cost of their monthly mortgage repayments and an even smaller number are considering selling their home as a result.
"Of course, this will come as little comfort to those who are struggling and in this instance, you should speak to your lender sooner rather than later. They will do what they can to help ensure you are able to maintain your payments and avoid defaulting on your mortgage.
"The good news is that the market has stood strong in the face of recent mortgage market turbulence and so while the cost of borrowing may have climbed, house prices haven’t fallen drastically as many predicted. There’s hope that we may have also seen the end to upward interest rate growth and so things should start to improve over the year ahead.”
