Millions of homeowners ‘set for struggle’

Research from the online mortgage firm mform has revealed that 14 per cent of UK homeowners are convinced that they will struggle to meet their mortgage repayment demands if the base rate of interest is increased by a quarter-point.

Additionally, should the Bank of England decide to up the cost of borrowing still further, by half a percentage point to 5.75 per cent this month, there will be closer to one in five homeowners dealing with debt management concerns, according to mform’s most recent study.

Eamonn Rice, chief executive at mform, said: “Borrowers have got used to low interest rates and many haven’t adjusted to the fact that we may now be entering a period of higher rates.”

“Anyone who hasn’t acted in the face of the three Bank of England rises since last August should start now,” he added.

Figures released by the Council of Mortgage Lenders earlier this week suggested that houses in the UK were becoming increasingly less affordable for the typical first-time buyer.