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Potential homebuyers fear rising rates and inflation will prevent them from getting onto or staying on the property ladder

Potential homebuyers fear rising rates and inflation will prevent them from getting onto or staying on the property ladder

A recent survey by Market Financial Solutions (MFS) has found that 28% of UK renters say that increased rates may stop them getting onto the housing ladder, while 19% of current homeowners fear that higher interest rates may prevent them from being able to repay their mortgage. The survey of 2000 UK adults, both homeowners and renters, found that the combined threat of rising rates and high inflation is likely to derail many of their hopes of purchasing a property in 2022. Paresh Raja, chief executive of MFS, said “The dual threat of rising inflation and rising interest rates will, naturally, have serious ramifications on those looking to get onto or move up the property ladder. As the cost of borrowing increases, homebuyers will need to consider the budgets carefully and assess their options.” The Bank of England increased the base rate from 0.1 per cent to 0.25 per cent in December 2021, a further hike was introduced in January this year of 0.5 per cent. While MFS’s survey found that 18 per cent of UK adults hoped to buy a home in 2022, with 14 per cent of UK renters hoping to buy their first home, 66 per cent admitted to being concerned about the rising rates alongside rising house prices. Raja added that “Mortgage brokers will continue to play an important role in vetting viable options for homebuyers.

But it is important that any buyers - from first-timers to seasoned investors -weigh up their options, particularly with many citing mortgage delays and complications as major issues in the process. “Seeking the right financial product is important, but finding the right lender who can support their needs and act quickly is vital.” The findings come just as the Nationwide House Price Index showed another increase in the average house price in February despite heightened fears over inflation and the invasion of Ukraine. According to Michael Bruce, chief executive and founder of estate agent Boomin: “We’re riding a wave of house price growth at present, driven by a market that is experiencing very high demand for homes that just simply aren’t available. It’s only natural that this wave will start to lose ferocity at some point, but there’s certainly no sign of that happening just yet, despite a squeeze on the cost of living and a double-digit increase in interest rates.”

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