Household Costs Indices for UK household groups

This report from the ONS highlights the failures of the Bank of England, with the incessent increases to the base rate heaping pain on mortgage borrowers across the country, with more still yet to feel that pain over this coming year. Mortgaged property owners were hit with the highest level of inflation at 6.3% compared to 4.9% for renters and 4% for mortgage-free owners. This shows that mortgage rate increases have been a big blow for many households, especially when layered on top of the already increasing costs of living.

In the UKs dynamic economic landscape, homeowners with mortgages are at the forefront of the inflation battle, enduring a staggering 6.3% inflation rate, driven by surging mortgage interest. This figure eclipses that overall housing inflation average of 5%, with private and social renters slightly better off, facing 4.9% and 4.8% increases respectively. There is a silver lining though, as there is an overall downtrend in housing inflation. These figures will no doubt spark a fervent dialogue on consumer endurance and the critical timing for Bank of England to cut rates.

For those looking to remortgage in 2023, it was akin to death by a thousand papercuts. Informing individuals that their mortgage payments would surge by hundreds of pounds each month came as a stark revelation to many accustomed to the exceptionally low rates since 2008. Furthermore, as the prospect of a reduction in the base rate in the first half of 2024 becomes increasingly remote, a significant improvement in the situation appears unlikely.