Proportion of borrowers concerned about rising interest rate falls

Recent research has revealed that only 29% of current mortgage borrowers are worried about the impact of rising interest rates on the size of repayments.

This proportion is down from the 36% that expressed concern six months ago, with the Halifax research questioning borrowers at what point they would struggle to meet the monthly repayments. Just under half (47%) said that either at above £150, or that they wouldn’t face any problems in covering the cost at all.

Whilst confidence in respect of mortgage costs remained fairly high according to the research,  the same could not be said for UK house prices. In fact, Halifax data found it had fallen to its lowest levels since 2013, with just 50% of respondents anticipating that prices would increase during the next 12 months. This is down from 58% in 2017.

However, even though optimism in the market appears to have fallen, the data suggests that general negativity has also declined. It found that 17% of respondents forecast that prices will fall over the next year, down from the 20% proportion recorded half a year ago.

Commenting on the research was Russell Galley. The Managing Director at Halifax stated: With mortgages the most affordable they have been in a decade, it is perhaps unsurprising that a proportion of people remain unconcerned by the prospects of a base rate rise. This research suggests that for the majority of mortgage holders, there would need to be multiple rate increases before the affordability of their repayments becomes an issue.

“Housing market optimism remains at a five year low and this echoes the subdued house price performance and activity levels we have seen since the end of last year, albeit set against a positive outlook for the majority who believe house prices will increase over the next 12 months. Indeed, it’s encouraging to see fewer people now predicting a fall in house prices compared with six months ago. Overall, we still expect house prices to rise in line with our forecasts for the rest of the year.”

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