The latest hike in interest rates is expected to push mortgage costs to 30% of household income.
Barclays chief executive CS Venkatakrishnan warned that households whose fixed term-mortgage deals were ending were going to face a “huge shock”. He added that between the 1990s and 2020 the average household spent about 20% of its income on mortgage payments or rent but that this would now jump.
“That’s going to be about 28% to 30% of their income, so there’s an income shock,” he told the Wall Street Journal CEO Council.
Lenders including Halifax, Santander, Atom Bank and Kensington Mortgages have increased mortgage rates this week by up to 0.2 percentage points, and more are expected to follow.
