An increase in interest rates on mortgages could cause up to a third of homeowners to struggle to keep up with repayments. The toxic domino effect of this may force many into rented accommodation, according to a new report by the HomeOwners Alliance.
The report, produced in association with Myhomemove, surveyed 2,500 people and produced some truly shocking results.
In a fiscal climate where incomes are stagnant, first time buyers are even more vulnerable to
volatile interest rate rises.
Almost half of 25 to 34-year-olds surveyed claimed an increase would cause them to struggle
financially and fear being trapped in a debt burden.
One interviewee revealed,
“I have debts on top of my mortgage, I will probably be forced to sell and rent.”
“At the minute, we can just about pay off the mortgage and bills with very little spare for
food. With increased rates we would struggle to find money for food every month.”
First time buyers simply want to save and invest in a home that holds its value without the
fear of facing crippling negative equity.
With Bank of England governor Mark Carney strongly hinting at taking action to reign in the
overheating housing market, an interest rate hike is a very real possibility over the next few