According to a survey among 18-34 year-olds, 2.07 million are now finding their finances squeezed, with the figure rising to 2.66 million should there be another 0.25 per cent hike.
register for the next forum
Eamonn Rice, chief executive of mform.co.uk, said: “There have been four increases in the Bank of England Base Rate in the past 12 months and this has hit many home owners hard. In particular, many FTBs either use all or most of their savings for a deposit or take out 100 per cent deals, so have loans that are a huge multiple of their income.”
However, hope could be on the horizon for those waiting to get onto the property ladder as Firstrung claimed FTBs would benefit most from reaching a market ‘tipping point’.
get the daily news delivered to your inbox
The firm believed FTBs could benefit from lower prices over the next 12 months as a raft of properties enter the market from those currently struggling and buy-to-let investors looking to sell at maximum profit.
Paul Holmes, operations director at Firstrung, commented: “Base Rate is now at a level not seen since 2001 and many existing owners will be now exiting their two and three-year tie-ins and be in for quite a shock as their mortgage rates adjust by up to 2 per cent. As such, many owners may look for a quick sale.”
Stephen Brown, senior technical director at Moneyquest, said: “It is very unlikely we will see a price crash to a level which will help FTBs. Most prices are already out of their reach and compounded by rates going up.”
find out more about this weeks industry news
