Over a third (36 per cent) of UK borrowers are considering taking out a new mortgage product in 2024, research from NerdWallet UK has revealed.
Of these, almost half (49 per cent) are considering a fixed-rate mortgage, while one in five (20 per cent) are considering a standard variable rate mortgage.
Additionally, one in four (26 per cent) borrowers plan to buy a new property in 2024 and one in 10 (10 per cent) are planning to remortgage.
This interest was explained by NerdWallet UK personal finance writer and spokesperson, Amy Knight, as driven by speculation the Bank of England may lower base rates in the year ahead.
“Last year we saw 65 per cent of Brits put off their home buying dreams due to the cost of living crisis and rising mortgage rates,” she said.
“Now, with some forecasters predicting the Bank of England could begin lowering the base rate in May or June this year, we may see new signs of home-buying determination among Brits, with one in four of us planning on buying a property with a mortgage this year.”
However, Knight warned borrowers to “be cautious” as there is “always a chance the cut may not happen” or that it may be “too small to make a significant difference”.
Affordability concerns
The research also reported that 89 per cent of Brits with a mortgage or those considering a new mortgage product are expecting to experience “affordability hardship” over the next 12 months.
This worry was particularly prevalent among the younger generation with 95 per cent of Gen Z stating they felt worried and 94 per cent of Millennials expressing a similar sentiment.
This was in contrast to Baby Boomers and Gen X, of which 70 per cent and 85 per cent respectively expressed concerns.
The biggest single concern for borrowers was the possibility of interest rates increasing over the next year, with 56 per cent of respondents identifying this as a worry for them.
This was ahead of concerns about mortgage payments increasing, identified by 51 per cent, having to go into debt or more debt to cover necessities, 22 per cent, and borrowers concerned about losing their job, 21 per cent.
Knight added: “Our findings reveal widespread affordability concerns, with hard-pressed borrowers having to cut their spending on necessities and luxuries and even taking on extra hours at work to afford their mortgage repayments.
tom.dunstan@ft.com
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