UK mortgages for 5 million households will rise by £5,100 a year by the end of 2024.”

Between now and the end of 2024, more than 5 million households could see their annual mortgage payments increase by an average of £5,100, adding new woes to households already struggling with high food and utility costs. It will be.

The increase will be driven by homeowners’ housing costs, according to an analysis by the Resolution Foundation think tank that by the end of 2024, nearly a fifth of UK households will have to spend more on housing. The total increase in loans is £26bn.

About £1,200 of that £5,100 figure comes from expectations that interest rates will rise faster than previously thought due to financial market turmoil caused by the government’s disastrous sub-budget, the think tank said. said it was.

“Between now and the next election, the UK is on track to lift £26bn of mortgages,” said Lindsay Judge, research director at the think tank.

Nearly half of borrowers will see their household budgets fall by at least 5% due to rising housing costs, the judge said, meaning there will be “widespread pain in living standards from rising interest rates.” said to

“Households across the UK are now experiencing an inflation-induced cost of living crisis as payment packets shrink and energy bills rise,” she said.

“Governments have responded with policies such as guaranteed energy prices, which are welcome. of living standards will fall again.”

The interest rate at the beginning of the year was 0.25%, bank of england It is expected to push it to more than 5% by early next year. After years of ultra-low borrowing costs, this new situation has shocked the housing market, with experts predicting that homeowners will struggle to pay off their mortgages, with mortgage repayments likely to rise in 2023. , The end of the UK’s 13-year housing market boom.

Kwasi Kwarteng’s underfunded tax relief package has thrown home buyers into turmoil, with hundreds of fixed-rate deals being withdrawn within days. Lenders are back with a much more expensive deal.

After hovering around 2% for several years, mortgage rates have skyrocketed. Two-year fixed mortgages averaged 6.47% on Friday, the highest since the 2008 financial crisis, and five-year fixed mortgages averaged 6.29%, according to data firm Moneyfacts.

The Resolution Foundation found that the cost of housing for 1.2 million homes with variable rate mortgages will impact 85% of fixed rate homeowners, while housing costs will rise sharply as the base rate changes. says it will grow in the next few years. when they moved on to new deals.

The think tank said 1.7 million households will see their mortgage payments increase from now until the end of the year. By early 2023, he also has 400,000 households to start making additional payments.

By the end of 2024, 5.1 million borrowers, nearly a fifth of all UK households, are expected to spend more on housing.

Borrowers in London were hit hardest, with average payments increasing by £8,000 over the period, more than double Wales’ level of £3,400 increase. But the impact is concentrated in London, where less than one in five of her households in the capital have a mortgage.

High-income households, on average, will face the largest increase in cash mortgage costs, but those facing the biggest increase as a percentage of income are those with mortgages, according to the report. low-income households;

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