Research shows that homeowners in suburban areas will be hit hardest by the Bank of England’s interest rate hike.
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Each month, more than 17,000 residents of the Southeast reach the end of their fixed-rate mortgage, more than in any other part of the country.
The worst impact of higher-priced mortgage deals after the rate hike will be concentrated in suburban areas, including Cambridgeshire, Northamptonshire, Essex and Berkshire, according to the data.
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The study, commissioned by the Liberal Democrats and commissioned by the Library of the House of Commons, came after the Bank of England raised interest rates from 4% to 4.25% last week.
It was the 11th consecutive rise and followed an unexpected rise in inflation last month. The increase would mean that most homeowners taking out a new mortgage or whose mortgage is due for renewal will see the interest rate rise.
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Each month, more than 17,000 residents of the Southeast reach the end of their fixed-rate mortgage, more than in any other part of the country.
Lib Dem analysis suggests that those who switch to the new two-year fixed rate mortgage will face a bill increase of £655 per month (file image)
South Milton Keynes, where the median home price is just over £357,000, has the largest number of households (280) receiving a monthly fixed rate mortgage.
The typical homeowner exiting a mortgage will now face a bill increase of £432 a month when they remortgage on a new two-year deal, according to the Lib Dems.
In Wokingham, which is the tenth most affected city with 250 households turning down a flat-rate deal each month, the median home price is £541,520.
Those switching to a new two-year fixed-rate mortgage are facing £655 a month increase in their bill, Lib Dem analysis suggests.
You can check how much a remortgage will cost you with This is Money’s best mortgage rate calculatorusing the value of your home and the amount of the loan.
Sarah Olney said that Middle England would be hit hardest by higher interest rates and that the government’s failure to control inflation tied the hands of the Bank of England (file image)
The party is calling on the government to set up a fund to help young families who cannot afford higher mortgage payments and risk their home being confiscated.
Under the proposals, homeowners whose mortgage payments have increased by more than 10% of their income can apply for subsidies of up to £300 a month to cover costs.
On the latest interest rate hike, Liberal Democrat Treasury spokeswoman Sarah Olney said last night: “Middle England will suffer the most from higher interest rates.
“The government’s inability to control inflation has left the Bank of England with only one choice. Unfortunately, hard-working families will suffer as a result of the uncontrolled growth of mortgage bills.
“The gross economic incompetence of the government has led to this point. Their inflation target is in tatters, and the economy is still reeling from Liz Truss’ failed budget.
“The time has come to intervene and save young families who are at risk of losing their home as a result of such a rise in rates. Middle England will never forgive the Conservative Party for causing them mortgage distress.”
In London, 13,000 households are waiving the flat rate every month, followed by 12,000 in the North West. Our Mortgage Rate Rise Calculator shows the impact of a Bank of England hike.
The Liberal Democrats’ claims come after studies show that nearly half of us are concerned about keeping up with rent and mortgage payments over the next year due to the cost of living crisis.
Legal & General’s Rebuilding Britain Index found that 95% of working households have cut real wages in the past 12 months.
Low-income households were hit more severely, with 99% of households with incomes under £20,000 having reduced real conditions.
Meanwhile, about 83% of people with incomes over £100,000 improved in the last year.
The figures also showed that 47% of households are worried that they will not be able to pay rent and mortgage payments over the next year.
