Around 1.5 million homeowners will face £1,800 in mortgage repayments in the new year.
The Resolution Foundation has warned that upcoming tax changes and interest rate cuts will benefit Britain’s wealthiest people, not the poorest.
With interest rates expected to remain above pre-pandemic levels, mortgage repayments will remain high for more than 1 million households in 2024.
Interest rates are rising as the Bank of England tries to keep inflation at 2%.
Mortgage payments will increase for many people in 2024
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The central bank has suspended a series of benchmark interest rate hikes over the past three months as the consumer price index (CPI) rate fell.
Analysts believe the rate cut will occur in 2024, but it will be later in the year, meaning mortgage payments will increase significantly.
Currently, the Bank of England’s benchmark interest rate has remained at 5.25% for the past three months.
Torsten Bell, managing director of the Resolution Foundation, warned that the country’s cost of living woes are likely to continue.
The economist explained: “2024 will be a big year, not just for politics but for our standard of living.
“The past two years have been dominated by soaring utility and food costs, which have affected everyone. 2024 will be very different, with inflation receding sooner than expected. means that they will benefit from an increase in real wages.
“But politicians who want to claim that happier days have come should be careful. Not everyone feels that way.”
The think tank highlighted the plight of homeowners and renters as interest rates continue to push up repayments.
Mr Bell added: “Rising interest rates actually made households better off in 2023. Household incomes rose by £19bn as increases in savings income outweighed increases in mortgage bills.” Ta.
“However, the opposite will be true in 2024, with 1.5 million mortgage holders expected to see their bills increase by an average of £1,800 a year.
“Millions of renters will also take a big hit in terms of housing costs. Only outright owners will see a significant increase in living standards.”