Increasing interest rates will put added pressure on approximately a quarter of homeowners, pushing more families into homelessness, a social housing organisation has warned.
Howarth Housing Group issued the warning following the Bank of England’s decision to increase bank rates from 1.75% to 2.25%, with further price hikes projected within the coming days.
As the value of the pound falls dramatically within international currency markets, these increases could spike to as much as 6% by next year, creating mounting fear for homeowners already experiencing a cost-of-living crisis, the group warns.
Benjamin Howarth, MD at Howarth Housing Group, a provider of temporary, emergency and supported housing, commented: ‘While we know that the majority of homeowners are on fixed-rate mortgages, for those with terms due to end shortly, first time buyers and those on variable rate and tracker mortgages there is a considerable concern that unmanageable hikes will place people at further risk of homelessness.
‘Research we conducted in August revealed that only 25% of Brits could afford to pay their mortgage for three months if they were suddenly to lose their job. When you add this to the pressure of average annual energy bills rising to more than £4,000 and inflation predicted to hit 18.6%, if left unchecked, many in our society face an extremely bleak financial winter. It is no longer a choice between heating your home or eating; for many, it will be a struggle to keep a roof over their heads altogether.’
Mr Howarth added: ‘With job insecurity at a high following the Covid-19 pandemic, services provided by companies like Howarth Housing Group have seen a huge surge in enquiries made by councils struggling to house an ever-increasing homeless population. I fear that as our capacity is stretched thin, there will be people who ultimately fall through the cracks, unable to access the support they need.’
