Millions of families across Britain are facing an average increase of £5,100 ($5,629) in their annual mortgage payments between now and the end of 2024, according to new analysis.
The Bank of England is expected to raise base interest rates from just 0.25 per cent, which they were at the start of the year, to 5.5 per cent by July 2023.
About 7.4 million householders have a mortgage on their main home in Britain. Roughly 1.2 million are already on variable deals, and will see swift rises in their repayments in line with the central bank's base rate.
Another 1.7 million households will see their mortgage payments rise later this year in the fourth quarter, including 500,000 households on new fixed-rate deals — and a further 400,000 households will pay more from early 2023.
That means by the end of 2024, 5.1 million mortgaged households — close to one fifth of all households in Britain today — will be spending more on their repayments as a result of higher mortgage rates.
Lindsay Judge, Research Director at the Resolution Foundation think tank, said: “Households across Britain are currently living through an inflation-driven cost-of-living crisis as pay packets shrink and energy bills rise.”
“The government has responded with policies such as the welcome Energy Price Guarantee. But the Bank of England is responding too by raising interest rates, which will benefit savers but cause a fresh living standards crunch for mortgaged households across Britain,” she said.
“Between now and the next election, Britain is on track for a £26 billion mortgage hike as over five million households see their annual mortgage payments rise by £5,100 on average.”
In London, average payments are set to rise £8,000 between now and the end of 2024, said the foundation.
That is more than twice the level of the £3,400 increase experienced by mortgaged households in Wales.
But the impact will be less concentrated in London, where fewer than 19 per cent of people have a mortgage.
“With almost half of all mortgagor households on course to see their family budgets fall by at least 5 per cent from higher payments, the living standards pain from rising interest rates will be widespread,” said Ms Judge.
According to the Resolution Foundation, £1,200 of the £5,100 average rise in mortgage costs is the result of changes in interest rates expectations since the Conservative government's mini budget was announced on September 23.
Lenders expect the availability of mortgages and consumer and corporate credit to shrink in the coming months as more people and businesses default on loans, according to a Bank of England survey.
The Credit Conditions Survey reported mortgage availability to households had already decreased in the three months to the end of August — and is expected to fall further in the coming months.
The availability of non-mortgage credit to households has also decreased slightly and is expected to fall further.
The latest survey was carried out between August 30 and September 16, before the mini budget was unveiled.
The number of available mortgages nosedived in the days following the mini budget amid market volatility. As deals have returned, average mortgage rates have been heading upwards.
Figures released by Moneyfacts.co.uk on Thursday indicated that there has been some steadying in average mortgage rates in the past couple of days, following the rapid increases.
The average two-year fixed-rate mortgage is now at 6.46 per cent, according to Moneyfacts.co.uk, while a typical five-year fixed-rate mortgage is at 6.28 per cent, down slightly from 6.32 per cent on Wednesday.
On the day of the mini budget, the average two-year fixed deal was 4.74 per cent and the average five-year fixed mortgage was 4.75 per cent.
The soaring costs of mortgages is forcing some parents to dip into their own savings to help their children get on the property ladder.
According to The Great British Retirement Survey 2022, 17 per cent of lower income households give their children half their annual income for the purpose.
Rising rates and the cost-of-living crisis are predicted to result in a crash in the property market, taking house prices back to 2013 levels and sparking a big drop in consumer spending, a top City economist has warned.
Simon French, senior economist at Panmure Gordon, said house prices will fall 14 per cent over the next three years as mortgage costs surge.
This would take the average house price adjusted for inflation back to levels last seen in the first quarter of 2013, before the government's Help to Buy scheme was introduced.
The average UK house price shrank in September, after hitting a record high the previous month.
The average price is now £293,835, figures compiled by Halifax bank show, after prices fell by 0.1 per cent.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Cricket World Cup League Two
Oman, UAE, Namibia
Al Amerat, Muscat
Results
Oman beat UAE by five wickets
UAE beat Namibia by eight runs
Fixtures
Wednesday January 8 –Oman v Namibia
Thursday January 9 – Oman v UAE
Saturday January 11 – UAE v Namibia
Sunday January 12 – Oman v Namibia
Stage 2 results
1 Caleb Ewan (AUS) Lotto Soudal 04:18:18
2 Sam Bennett (IRL) Deceuninck-QuickStep 00:00:02
3 Arnaud Demare (FRA) Groupama-FDJ 00:00:04
4 Diego Ulissi (ITA) UAE Team Emirates
5 Rick Zabel (GER) Israel Start-Up Nation
General Classification
1 Caleb Ewan (AUS) Lotto Soudal 07:47:19
2 Sam Bennett (IRL) Deceuninck-QuickStep 00:00:12
3 Arnaud Demare (FRA) Groupama-FDJ 00:00:16
4 Nikolai Cherkasov (RUS) Gazprom-Rusvelo 00:00:17
5 Alexey Lutsensko (KAZ) Astana Pro Team 00:00:19
The specs
Engine: Two permanent-magnet synchronous AC motors
Transmission: two-speed
Power: 671hp
Torque: 849Nm
Range: 456km
Price: from Dh437,900
On sale: now
Most sought after workplace benefits in the UAE
- Flexible work arrangements
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- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
How to donate
Text the following numbers:
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KILLING OF QASSEM SULEIMANI
UAE v Ireland
1st ODI, UAE win by 6 wickets
2nd ODI, January 12
3rd ODI, January 14
4th ODI, January 16
LAST 16 DRAW
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If you go
The flights
Emirates and Etihad fly direct to Nairobi, with fares starting from Dh1,695. The resort can be reached from Nairobi via a 35-minute flight from Wilson Airport or Jomo Kenyatta International Airport, or by road, which takes at least three hours.
The rooms
Rooms at Fairmont Mount Kenya range from Dh1,870 per night for a deluxe room to Dh11,000 per night for the William Holden Cottage.
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
LA LIGA FIXTURES
Friday Athletic Bilbao v Celta Vigo (Kick-off midnight UAE)
Saturday Levante v Getafe (5pm), Sevilla v Real Madrid (7.15pm), Atletico Madrid v Real Valladolid (9.30pm), Cadiz v Barcelona (midnight)
Sunday Granada v Huesca (5pm), Osasuna v Real Betis (7.15pm), Villarreal v Elche (9.30pm), Alaves v Real Sociedad (midnight)
Monday Eibar v Valencia (midnight)
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Results:
2.15pm: Handicap (PA) Dh60,000 1,200m.
Winner: AZ Dhabyan, Adam McLean (jockey), Saleha Al Ghurair (trainer).
2.45pm: Maiden (PA) Dh60,000 1,200m.
Winner: Ashton Tourettes, Sam Hitchcott, Ibrahim Aseel.
3.15pm: Conditions (PA) Dh60,000 2,000m.
Winner: Hareer Al Reef, Gerald Avranche, Abdallah Al Hammadi.
3.45pm: Maiden (PA) Dh60,000 1,700m.
Winner: Kenz Al Reef, Gerald Avranche, Abdallah Al Hammadi.
4.15pm: Sheikh Ahmed bin Rashid Al Maktoum Cup (TB) Dh 200,000 1,700m.
Winner: Mystique Moon, Sam Hitchcott, Doug Watson.
4.45pm: The Crown Prince Of Sharjah Cup Prestige (PA) Dh200,000 1,200m.
Winner: ES Ajeeb, Sam Hitchcott, Ibrahim Aseel.
Tailors and retailers miss out on back-to-school rush
Tailors and retailers across the city said it was an ominous start to what is usually a busy season for sales.
With many parents opting to continue home learning for their children, the usual rush to buy school uniforms was muted this year.
“So far we have taken about 70 to 80 orders for items like shirts and trousers,” said Vikram Attrai, manager at Stallion Bespoke Tailors in Dubai.
“Last year in the same period we had about 200 orders and lots of demand.
“We custom fit uniform pieces and use materials such as cotton, wool and cashmere.
“Depending on size, a white shirt with logo is priced at about Dh100 to Dh150 and shorts, trousers, skirts and dresses cost between Dh150 to Dh250 a piece.”
A spokesman for Threads, a uniform shop based in Times Square Centre Dubai, said customer footfall had slowed down dramatically over the past few months.
“Now parents have the option to keep children doing online learning they don’t need uniforms so it has quietened down.”
THE BIO
Bio Box
Role Model: Sheikh Zayed, God bless his soul
Favorite book: Zayed Biography of the leader
Favorite quote: To be or not to be, that is the question, from William Shakespeare's Hamlet
Favorite food: seafood
Favorite place to travel: Lebanon
Favorite movie: Braveheart
Army of the Dead
Director: Zack Snyder
Stars: Dave Bautista, Ella Purnell, Omari Hardwick, Ana de la Reguera
Three stars
Specs%20
%3Cp%3E%3Cstrong%3EPower%20train%3A%20%3C%2Fstrong%3E4.0-litre%20twin-turbo%20V8%20and%20synchronous%20electric%20motor%3Cbr%3E%3Cstrong%3EMax%20power%3A%20%3C%2Fstrong%3E800hp%3Cbr%3E%3Cstrong%3EMax%20torque%3A%20%3C%2Fstrong%3E950Nm%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3EEight-speed%20auto%3Cbr%3E%3Cstrong%3EBattery%3A%20%3C%2Fstrong%3E25.7kWh%20lithium-ion%3Cbr%3E0-100km%2Fh%3A%203.4sec%3Cbr%3E0-200km%2Fh%3A%2011.4sec%3Cbr%3E%3Cstrong%3ETop%20speed%3A%20%3C%2Fstrong%3E312km%2Fh%3Cbr%3E%3Cstrong%3EMax%20electric-only%20range%3A%3C%2Fstrong%3E%2060km%20(claimed)%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Q3%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh1.2m%20(estimate)%3Cbr%3E%3Cbr%3E%3C%2Fp%3E%0A
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
