Homeowners unruffled by rate rise says survey

Despite shrill complaints from lobbyists and fevered media speculation on the next move, most Britons say that they are entirely unaffected by the recent interest rate rise.

Almost four-fifths of mortgage holders ñ 78 per cent ñ say that their finances are unchanged following the quarter point increase in the cost of borrowing in August.

This was because their mortgages are on either fixed or capped rates, said 45 per cent, while 33 per cent said that they could easily afford the increases in mortgage costs.

The remaining 22 per cent said that their spending would be affected by the rise, which has added £18 a month to the costs of the average mortgage, or £221 a year.

The rise has also persuaded some would-be buyers to stay out of the market, and some looking for the best mortgage rate to release equity have postponed their plans.

“Our findings show how even a modest change in base rates can begin to affect attitudes,” said Chris Rhodes of Alliance and Leicester, which conducted the survey.

“The Bank of England’s decision should take some of the heat out of the housing market without putting too much stress on the budgets of those people who had no plans to move.

“However, while most people can afford higher mortgage payments, our figures show that a minority will have to make savings.”

© Adfero Ltd

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