The figure actually reached its lowest point during the month of September, when it fell to just 15.2%. Compared with 2008, when it reached an all-time high of 20.5%, it’s a huge drop, backing up the ‘opinion research’ also commissioned by Barclays.
Looking into how customers felt about their mortgage payments, the bank found that most homeowners felt ‘more comfortable’ with the amount they were paying every month, compared with how they’d felt in the previous year: 64% of them said their mortgage was affordable, which marks a significant jump on the 52% figure from 12 months before.
What’s more, fully 83% said they had ‘room for manoeuvre’ if their situation changed – or if interest rates changed.
Talking of interest rates, everyone knows that they’ll have to rise sooner or later. We’ve nearly reached the three-year anniversary of the Bank of England’s all-time-low base rate, as it’s been down at 0.5% ever since March 2009.
But that doesn’t mean it’s due to rise anytime soon, and today’s mortgage holders are aware of this: only 40% of them believe we’ll see the base rate rise over the next 12 months, compared with 74% at the beginning of last year. The research indicates that 25% believe rates will begin rising in 2013.
As for the effect that putative rise would have, 73% of homeowners already have a plan to cope with it. Approximately a third say they’ll cut back on spending in other areas, from holidays to dining out and buying clothes.
When it comes to remortgaging, uncertainty about the base rate does make it harder to decide on the best type of mortgage to take out, so it’s important to get some mortgage advice before making any firm commitment.
After all, fixed-rate mortgages can appeal to people who prefer the security of knowing what their monthly payments will be, while others are prepared to accept the risk of a rate increase if a tracker-rate mortgage offers them a better deal today. A good mortgage calculator can bring some clarity to the subject, helping homeowners see the kind of impact that different rates would have on their monthly budget.
Looking ahead to the rest of this year, Barclays’ research asked homeowners what areas of their budget concerned them most. Energy bills took the number-one spot, with 63% concerned about them. 39% were worried about the cost of running a car, while 35% said food costs.
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