Previous research found that 59% of rent or mortgage payers are already struggling to keep up with their housing costs, with more than a quarter (26%) feeling too ashamed to ask for financial help.
Shelter’s helpline adviser Nadeem Khan said:
“Every day at Shelter we hear from people who are feeling overwhelmed by mounting rent or mortgage bills, as the increasing pressure of sky high housing costs continues to take its toll."
One in six people had to borrow money to pay October’s rent or mortgage, according to research conducted for the Debt Advisory Centre.
A recent survey by Legal & General Mortgage Club found that a third of UK mortgage borrowers would not be able to afford their repayments if they increased by £100-£199 a month.
Fears surrounding mortgage repayments have increased amid talks of a Bank of England rate rise. A rise of two points, taking the base rate to 2.5%, would add almost £200 a month to the average repayment.
Founder and CEO of eMoov Russell Quirk has already warned that a rate rise could increase monthly mortgage cost by 25%.
Industry experts believe interest rates will begin to rise gradually from the middle of 2015, with NIESR forecasting a rise from the current level of 0.5% to 1% by the end of 2015 before rising gradually to to 2.75% by the end of 2019.
However, economists at the Bank of England said that the majority of mortgage borrowers could cope with a 2% increase in interest rates.
Assuming incomes rise by 10%, just 4% of mortgage holders would need to take action if interest rates rose to 2.5% from their current 0.5% historic low.
The report stated that under these circumstances, only 1.3% of households “would need to take some kind of action” with regards to spending due to higher mortgage costs.
