Almost one in five homeowners admits they are now struggling to meet their mortgage repayments following recent interest rate rises, according to research.
An estimated three million people have come under financial strain since the Bank of England raised the cost of borrowing five times in less than a year.
About 11 per cent of homeowners claimed they might have to consider selling their property if rates increased further, according to mortgage broker Purely Mortgages.
At the same time, 40 per cent of people said they were now more worried about being able to afford their monthly repayments than at any other time during the past 12 months.
One in five homeowners said a rise of just £40 a month in their repayments would cause them financial difficulties. Nine per cent said having to find an extra £20 would cause problems.
The research found older people had been worst hit by the interest rate rises, with about half of the three million people who are struggling to meet their repayments aged over 50.
The survey also found more than half of homeowners had already taken action to enable them to meet higher mortgage repayments.
About 14 per cent of people had cancelled holidays to save money, while a third said they would forgo time away if interest rates rose again and they found they were struggling.
Mark Chilton, chief executive of Purely Mortgages, said: "We may yet get another interest rate rise this year and if that happens figures like these are only set to get worse.
"Although interest rates are still historically low, it doesn't take much for people to feel the pinch, especially older people on lower incomes."
Recent figures from mortgage lenders and estate agents have shown that rising interest rates have cooled the housing market and hit the level of borrowing people are prepared to take on.
Britain's biggest mortgage lender, Halifax, recently said house prices fell by 0.6 per cent during August, while the Royal Institution of Chartered Surveyors also pointed to modest price falls across most of the country.
* YouGov questioned 2,031 people during September.
Wednesday September 22, 2004
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