Global Courant
LONDON
About 7.5 million households in the UK will expect repayments to increase by 2026 and annual mortgage repayments expected to increase by £15.8 billion ($20.2 billion) by 2026 due to rising interest rates, a recent study by the Resolution Foundation revealed.
The research said interest rates are expected to peak near 6% by mid-2024, indicating the possibility of a five-quarter point increase in rate.
“Market expectations that interest rates will rise even higher and stay higher for longer have a major impact on the mortgage market, with deals being withdrawn and replaced with new higher-rate mortgages,” said senior economist Simon Pittaway. Solution Foundation.
“This means that the mortgage crisis is currently on track to raise their mortgage bills by £15.8bn and next year re-mortgants should see their costs rise by an average of £2,900,” he added.
“Of course, market expectations may be wrong and rate increases may not be as bad as feared. But with three-fifths of the UK’s £15.7bn mortgage growth still being passed on to households, increased repayments will solve an ongoing problem.” “As the General Elections approach, the living standards of millions of households have hit bottom,” he said.
Average two-year fixed-rate mortgage is expected to reach 6.25% by the end of this year and remain above 4.5% by the end of 2027.
As a result, the ongoing mortgage crisis is expected to intensify significantly, according to the foundation.
The UK is grappling with rising consumer inflation, which reached 8.7% year-on-year in April, down slightly from 10.1% in March, but above the expected 8.2%.
The Office of National Statistics (ONS) underlined that food prices continued to rise rapidly, reaching the highest rate in nearly 45 years.
Despite the slowdown in food prices in the year leading up to April, it approached a record 19.1%.
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