More than half of home owners, 56% of those aged 25 to 34, say they have been deterred from climbing further up the housing ladder in the UK due to the recent rise in interest rates.
The rise from 0.25% to 0.5%, the first increase by the Bank of England for a decade, was the first rate increase for 37% of owners but for those aged 25 to 34 it was the first rise for 78%, according to the research from hybrid estate agent eMoov.
Despite being the first increase in over a decade, 46% of those asked remained undeterred from buying another property, with 17% put off from a property sale and 13% putting the idea of a purchase on hold for the time being.
However, those in the first time buyer age bracket seemed more deterred from another purchase with 56% put off from climbing the ladder, 40% indefinitely, 16% for the time being.
The increase had more of an effect in London where 60% of owner were put off from another purchase by the recent increase in rates, 50% completely with a further 10% deterred from the time being.
The highest number of home owners seeing an interest rate rise for the first time was in London where 63% have been affected while the North East was the highest region outside of the capital at 55%.
But despite so many seeing interest rates rise for the first time since becoming home owners when asked what impact it had on their monthly mortgage payments some 64% hardly noticed, while 33% saw a manageable increase. Just 3% believed it had a serious impact on their monthly affordability.
Those aged 45 to 50 were worst hit with 5% seeing a serious impact on their monthly payments, although this increased to 11% for those in both the South West and North East. It was least notable in Wales, where 83% of those surveyed answered that they had hardly noticed an increase.
When asked how much interest rates would have to increase by to stop them from climbing the ladder some 49% of owners said they would have to see an increase of 2% or more before they were deterred while 15% said it would be 1.5%, 18% said a rise of 1% and 12% by just 0.5%.
According to Russell Quirk, chief executive officer of eMoov, the research shows that there is some trepidation among younger owners about interest rates. ‘The majority have weathered the financial implications and the marginal hike has made it easy enough to do so,’ he said.
Source: Property Wire