As many as 320,000 UK adults have been pushed into poverty by soaring mortgage costs after the sharpest increase in interest rates since the 1980s, a leading thinktank has said.
Highlighting the damage caused by Britain’s exploding mortgage timebomb, the Institute for Fiscal Studies (IFS) said individuals who needed to renew their home loans or take out new ones in the past two years had experienced a sharp fall in their disposable income.
It said some households were paying thousands of pounds more in additional mortgage payments, in a development that was likely to have driven up poverty rates among mortgagors by 1.4 percentage points between December 2021 and December 2023.
It said this jump in relative poverty – defined as people living in households with income below 60% of the median – was the equivalent of 320,000 more adults falling below the breadline.
Millions of homeowners have faced a leap in borrowing costs after 14 consecutive increases in the Bank of England base rate from a record low of 0.1% in December 2021 to 5.25%, where it sits now, in its most aggressive assault on inflation for four decades.
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