Renting or buying a home - what's in store for 2023?
Jan 9, 2023
Mortgage and Bank of England interest rates have been increasing since the start of 2022. The Office for National Statistics (ONS) has published new analysis exploring how people with fixed-rate mortgage deals coming up for renewals are facing higher mortgage costs.
The analysis also looks at how housing costs have increased f or those with variable rate mortgages and private renters. Here are the main points.
INTEREST RATES
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• More than 1.4 million households in the UK are facing the prospect of interest rate rises when they renew their fixed rate mortgages this year.
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• 57% of fixed rate mortgages in the UK coming up for renewal in 2023 were fixed at interest rates below 2%.
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• In the first quarter of this year 353,000 fixed rate mortgages will have to be renewed. Our calculations, based on Bank of England transactions data, suggest that the number of fixed rate mortgage deals coming to an end in 2023 will peak in Q2 2023 at 371,000.
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• Those on a variable rate mortgage will have already seen higher interest rates as a result of market conditions including rises in the Bank of England base rate.
RENTING
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• Private renters are also facing an increase to their housing costs, with rental price growth in November 2022 at its highest rate in the UK since records began in 2016.
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• Renters spend almost a quarter (24%) of their median weekly expenditure on rent compared with mortgage holders who spend 16% of their median weekly expenditure on their mortgage repayments.
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• Around a quarter (26%) of all renters surveyed between 7 and 18 December 2022, reported their rent payments had gone up in the last 6 months, according to data from the Opinions and Lifestyle Survey.
