More than half (54 per cent) of Britons surveyed by the BSA said they were cutting back on their energy use while 31 per cent said they planned to buy less food and clothing as inflation hit their wallets. Just 21 per cent said they were concerned about higher interest rates.
Around half (51 per cent) said they would think twice about spending on non-essentials such as going to the cinema or a restaurant while nearly a third said they planned to reduce spending on clothing and even food, even though only 41 percent said they were shopping around to find cheaper prices.
Paul Broadhead (pictured), head of mortgage and housing policy at the BSA, said: “It would have been naïve not to expect that people would be cutting back on their spending during the current cost of living crisis, but to see the extent to which people are struggling and being forced to cut back on essentials, such as heating and food, is concerning.
“It’s clear that spiraling inflation is impacting almost every household, and the possibility of another Bank Rate increase later today is only likely to add more worry onto the nation’s shoulders.”
The online survey tracked 2,097 adults during the first week of June.
When asked to rank their biggest money worries, 73 per cent cited higher energy costs and 66 percent chose the price of food.
In the run-up to the Bank of England’s decision today, rising interest rates were a concern to just 21 percent of respondents.
Among those who do not own their own homes, 24 per cent conceded that they were not feeling confident about being able to pay housing costs such as rent – a percentage that was double what it was in the first quarter of last year and 50 percent higher than it was three months ago, the BSA said. Among homeowners, just six percent said they were concerned about their ability to pay their mortgage.
Housing market sentiment
The BSA also found that consumer confidence in the housing market had declined. The number of people who said they thought that it was a good time to buy a home slumped to 16 per cent, the lowest level since 2008, when the BSA began asking about it.
The main reason cited by the 39 per cent who said it was not a good time to buy a property was the high cost of a home which made up 73 per cent of the multi-choice responses; the effect of rising interest rates at 70 per cent; and zooming inflation at 70 per cent.
Some 62 per cent of respondents cited the difficulty of raising a deposit as a barrier to home ownership, while the second most common barrier cited by 53 per cent in the survey was being unable to afford the monthly mortgage repayment.
“Whilst it’s encouraging that less than one in 10 homeowners are concerned about keeping up with their mortgage payments, this is likely to be because it will take time for Bank Rate rises to be felt by most borrowers, as around 80 per cent are on fixed rates”, Broadhead said.
“Borrowers must however start planning for when their mortgage deal ends, as whilst the impact is likely to be quite modest, any increase in expenditure in the current environment will be unwelcome.
“Of greater concern is the growing number of people who are worried about paying their rent, which has doubled in the last 15 months. Whilst the support packages provided by the government to date are obviously welcome interventions, it’s clear that for many, more support is needed if families are to survive the current crisis without increasing levels of personal debt.”
