Menu

News

Which areas are most affected by soaring mortgage costs?

Which areas are most affected by soaring mortgage costs?
Christina Hoghton
Written By:
Christina Hoghton
Posted:
26/04/2024
Updated:
26/04/2024

Rising housing costs are impacting financial resilience across the country.

Over 1.4 million people remortgaged from a fixed rate mortgage last year, and more than half were coming off rates under 2%, meaning they faced sharp payment shock.

By the end of last year, more than a third were struggling with rent or mortgage costs and, according to Hargreaves Lansdown, “470,000 are at critical risk of falling into arrears”.

Most exposed to rises

According to figures from the Office for National Statistics (ONS), the areas most exposed to mortgage rises are those where prices tend to be higher, including Bromley, Windsor and East Hampshire.

The biggest average rises in mortgages are in Kensington and Chelsea at 26.8%, Camden at 23.1% and Tower Hamlets at 22.1%.

The most exposed areas to rental increases are dominated by London and the immediate surrounding areas.

The biggest average rental increases are in Kensington and Chelsea at 6.1%, Hackley at 5.8% and Westminster at 5.5%.

The ONS has published a calculator scoring each area for how exposed they are to housing costs – based on the proportion affected by rising costs and the increase in costs as a proportion of disposable income.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said of the figures: “The runaway cost of keeping a roof over our heads is laying waste to the financial resilience of millions of people.

“The average two-year fixed mortgage rate is 5.84%, according to Moneyfacts, which is a horrendous hike for the 1.4 million people who remortgaged last year – especially when over half of them had previously been paying less than 2%.

“Meanwhile, average rents are up almost 10%, pushing people to breaking point. The squeeze on renters is actually tighter than on those moving to a new mortgage.”

Related: What the latest inflation announcement means for mortgages