Pause in rate rises will bring relief, but housing costs most significant ‘pressure point’ for people’s finances, says StepChange
StepChange Debt Charity has reacted to the news from the Bank of England that the base rate has remained at 5.25% today. While it is welcome to not see a further rise in interest rates, StepChange says the pain for households is far from over, amidst new research by the charity that reveals two thirds of mortgage holders (65%) say the rise in interest rates has had a negative effect on their overall financial situation.
Richard Lane, Director of External Affairs at StepChange Debt Charity, said:
“With interest rates now looking likely to remain higher for much longer than might have been expected, housing costs have rapidly become the most significant pressure point for household budgets. Eighteen months ago many wouldn’t have envisioned facing such steep rises in their mortgage or rent payments. However, the rise in rates has now impacted millions of households, with our latest YouGov polling revealing that more than a third (36%) of mortgage holders have seen their mortgage increase by 10% or more.
“The pain of a sustained period of high interest rates is starting to be felt by mortgage holders. StepChange’s latest client data reveals a slight increase in the proportion of clients with mortgage arrears, while figures from the Bank of England last week revealed that UK mortgages in arrears jumped to a seven year high. However, it’s not just those with mortgage who are feeling the effect, as private renters continue to face staggeringly high rents as many of their landlords pass on higher borrowing costs.”
For anyone worried about or struggling with housing debts or any other type of debt, StepChange provides free and impartial advice, both online and over the phone. The charity also has a dedicated hub for homeowners, and offer free mortgage advice and mortgage debt advice, to help people explore and understand their options, whether or not they’re currently experiencing financial difficulty.