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Annual mortgage payments set to rise more than £5,000 in two years

Anish Vij

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Annual mortgage payments set to rise more than £5,000 in two years

Annual mortgage payments are expected to rise by an average of £5,100 between now and the end of 2024, says Resolution Foundation think tank.

The organisation has predicted that the housing costs for nearly a fifth of British households could increase within the next two years.

Expectations of a higher interest rate have also lead to the assumption that roughly £1,200 of the £5,100 figure was due to the governments mini-budget, the think tank have claimed.

Annual mortgage payments are expected to be on the rise. Credit: Matthew Browne / Alamy Stock Photo
Annual mortgage payments are expected to be on the rise. Credit: Matthew Browne / Alamy Stock Photo

Lindsay Judge, the think tank’s research director, said: "Between now and the next election, Britain is on track for a £26bn mortgage hike.

"Households across Britain are currently living through an inflation-driven cost of living crisis as pay packets shrink and energy bills rise.

"The government has responded with policies such as the welcome energy price guarantee. But the Bank of England is responding too by raising interest rates, which will benefit savers but cause a fresh living standards crunch for mortgaged households."

The think tank also claimed that the increase would create 'winners and losers', with high income households facing a big rise in mortgage costs in cash terms on average, while lower income families will face the biggest rise as a share of their income.

Credit: Diana Parkhouse / Alamy Stock Photo
Credit: Diana Parkhouse / Alamy Stock Photo

Buying agent Henry Pryor, who has 39 years working in the business, told LADbible that first time buyers are ‘f**ked’ unless their parents already own a home.

He said: "I'm really happy spending as much time as necessary with the next generation.

"They've been properly f**ked over by my generation. And they need to know the reality rather than what their parents say.

"We've loved the situation, the stupidity, at the moment of mum and dad lending money to the kids, so that kids can afford the prices that mum and dad and mum and dad's mates want to charge for their homes.

"That's not sensible. It means if your parents don't own their own home, you'll find it incredibly difficult to get your own home yourself.

"If your parents don't own the home, you will likely only to be able to rent a home.

"If your parents give you a leg up, the bank of mum and dad is the ninth largest mortgage lender in the country."

Buying agent Henry Pryor, who has 39 years working in the business, has weighed in on the crisis and says that first time buyers are ‘f**ked’ unless their parents already own a home. Credit: BBC
Buying agent Henry Pryor, who has 39 years working in the business, has weighed in on the crisis and says that first time buyers are ‘f**ked’ unless their parents already own a home. Credit: BBC

The buying expert also spoke about 'negative equity', calling it a buyer's 'worst nightmare'.

He explained: "It's one of the scariest things you can ever find in life because you can't get out of it.

"If you sell a house, you'll still be left owing the bank money. We don't have a system like they do in America, where if your house is worth less than a mortgage, you just hand back the keys.

"In this country, if your house is worth less than the mortgage, I will use a technical financial expression - you're f**ked.

"Because you've still got to pay back all that money until it's all paid back.

"In the meantime, where do you live? You can't borrow money, because you will have been bankrupted probably by your lender, because you haven't repaid your mortgage.

"And that is really when house prices fall. That's what people worry about.

"When they want to sell they find the house is worth less than their mortgage, and therefore they can't sell.

"Therefore, they can't move, they can't get a new job or relocate or get divorced or get married or have kids or your life gets put on hold."

Featured Image Credit: Alex Segre / insta_photos / Alamy

Topics: UK News, Money, Politics

Anish Vij
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