A sizable portion of borrowers are also cutting back on spending
Nearly a third of UK homeowners who are approaching the end of their fixed mortgage deals are taking extra work to enhance their income, anticipating repayment rises, according to online jobs marketplace Indeed Flex.
New data released by the digital staffing platform showed that 30% of homeowners due to remortgage in the next 12 months were already making extra money by doing extra shifts or taking on side hustles — including temporary work — to boost their savings.
Results of Indeed Flex’s survey of 2,000 Britons also revealed that three in 10 of those taking on extra work were from 25 to 34 years old – an age group that is typically newer to the housing market, meaning repayment rates are likely to be higher compared with older owner-occupiers. More than a tenth, or 11%, of those aged between 55 to 64 are pursuing additional employment to cover increased repayment costs.
More than half, or 54%, of UK mortgage holders were preparing for financial changes in the next 12 months by also cutting back on non-essential spending, including takeaways and holidays, while a third said they were spending less and saving more.
According to UK Finance mortgage data, 800,000 fixed rate mortgage deals are set to expire in the latter half of 2023, along with 1.6 million in 2024. With borrowing rates rising, the Bank of England estimated that households could see their outgoings increase by an average of £220 a month when they renewed.
“Facing financial realities head-on can be challenging, but ignoring them is likely to prove costly in the long run,” commented Novo Constare, chief executive at Indeed Flex. “While those with mortgages expiring this year cannot escape repayment increases, a substantial number are actively seizing control of their finances and trying to get ahead of the increase in their outgoings.”
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