25 August 2022 – London, UK – The proportion of UK borrowers who believe it is a good time to buy a home has fallen significantly in the last six months according to the latest RFI Global UK Mortgage Council; a bi-annual survey of over 2,000 UK consumers who either hold a mortgage on their home or intend to take out a mortgage on their main residence in the next 12 months.
Just 23% of borrowers believe it is a good time to buy a home, compared to 38% of borrowers at the end of 2021 (H2 2021). The proportion of borrowers who believe it is not a good time has nearly doubled from 14% at the beginning of 2021 to 32%. This is almost as high as the concern that was evident among 35% of borrowers after the first six months of the pandemic in 2020 when many people were unable to work (H1 2020).
Inflation and rate rises are key concerns for borrowers. Inflation is the primary concern for borrowers currently, with the majority of borrowers (65%) reporting that they are concerned about the impact that inflation will have on them this year. Additionally, 43% of borrowers are worried about the impact of further interest rate rises.
“Although the recent Bank of England interest rate increase – up 0.5% to 1.75% – will have most impact on those households who have a variable or tracker mortgage rate rather than those with fix rate deals, our data shows that borrowers are clearly concerned about interest rate rises, particularly with the cost of almost every other item of household expenditure increasing at the same time,” says Jess Garratt, Insights Manager for Consumer Credit, Deposits and Payments at RFI Global. “Households with fixed rate deals will be protected from rising interest rates for some time, but those whose deals are ending soon are in for a shock. With no clear end for the cost of living crisis, everyone is worried.”
About 21% of households are on a variable rate mortgage according to the banking body UK Finance. RFI Global data shows that almost everyone (91%) is concerned about inflation and the rising cost of living.
Borrower stress has already increased significantly. The proportion of borrowers expecting to struggle to make mortgage repayments in the next 12 months increased significantly to 23%, up from 15% this time last year (H1 2021)); and is now higher than the levels of stress seen during the first wave of the pandemic (21% at the end of H1 2020). The rising cost of living and rising mortgage rates are the primary drivers of this increase.
If their mortgage rates were to increase in the next 12 months, borrowers are most likely to make additional payments (16%) or change their type of interest rate (14%) to offset the impact.
Borrowers are looking for support. 30% of borrowers would value information from their lender on different options available to them and 28% would value information on how rate rises will impact them. Borrowers more concerned about the impact of rate rises are more likely to value support and information from their lender – highlighting the need for lenders to be on the front foot with their communication to customers.
Notes to editors:
About RFI Global
RFI Global is the data and insight partner for the world’s financial services community. Since 2006 we’ve provided tailored subscription-based insight and data solutions for local, regional and global FS players that enable them to make data-driven decisions confidently and quickly.
RFI Global UK Mortgage Council study surveys a nationally representative sample of banked adult consumers every six months. This survey was conducted at the end of June 2022 (H1 2022). All survey respondents either hold a mortgage on their home (n=1,600) or intend to take out a mortgage for their main residence in the next 12 months (n=429).
For further information please contact:
Teresa Horscroft, Eureka Communications
Tel: +44 (0)7990 520390
Email: [email protected]
Or Valeria Balaro, RFI Global
Email: [email protected]