One in 5 Britons head for mortgage pain – think tank

LONDON, Oct 15 (Reuters) – One in five families in Britain will suffer a financial hit by having to pay more on their mortgages by 2024, about a quarter of the increase caused by recent market turmoil, said a thinking group. Saturday.

The Resolution Foundation, which focuses on issues facing low-income households, said more than 5 million families will see their annual mortgage payments rise by an average of 5,100 pounds ($5,700.27) over the next few months. next two years.

Of that, £1,200 reflected expectations for higher interest rate hikes since the September 23 “mini-budget” that sent borrowing costs soaring with its unfunded tax cuts.

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“With almost half of all mortgage debtor households on track to see their family budgets fall by at least 5% due to higher payments, the pain in living standards due to rising interest rates interest will be widespread,” said Lindsay Judge, director of research at the Resolution Foundation.

The Bank of England raised its benchmark borrowing rate from 0.1% last December to 2.25% now and is expected to announce another big hike on November 3, followed by others that will take the Bank Rate above 5%, according to financial market bets.

The BoE is trying to rein in inflation to near double digits and economists say the tax cuts promised by Truss – even after its U-turn decision on Friday not to block a corporate tax hike – will add to the woes. price pressures.

The Resolution Foundation said 1.2 million households with mortgages on variable rate deals would see their housing costs rise with the Bank Rate, while 85 per cent with fixed rate deals would see their costs rise more. gradually.

($1 = 0.8947 pounds)

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Reporting by Muvija M Writing by William Schomberg Editing by Andy Bruce

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