Housing concerns now rival cost-of-living crisis, NHS, and economy in the UK – The Intermediary

Housing has emerged as a critical issue in the UK, now ranked fourth at 64% among the top national concerns, closely trailing the cost-of-living crisis (89%), the NHS (88%), and the economy (70%), according to recent survey data from the Office for National Statistics (ONS).

The focus on housing has significantly risen from 53% late last year, reflecting the increasing financial pressure faced by homeowners and renters alike.

Sarah Coles, head of personal finance at Hargreaves Lansdown, explains the growing concern: “Housing is more of a pressing concern for people than crime, climate change, and immigration. Almost two in three people now say it’s a key issue facing the UK — not far behind the cost-of-living crisis, the NHS, and the economy. And it’s hardly surprising.”

The financial strain is evident as housing costs soar; over 1.4 million people refinanced from fixed-rate mortgages last year, many transitioning from rates under 2% to rates nearing 5%.

Currently, the average 2-year fixed-rate mortgage is approximately 5.94%, placing substantial financial burden on homeowners. Coles notes: “It’s no wonder figures from the HL Savings & Resilience Barometer show that one in four people with a mortgage are at risk of falling into arrears by the end of the year.”

Renters face even harsher realities. The exit of landlords from the market has reduced available properties, driving rents up by approximately 10% over the past year. This increase significantly impacts renters who generally have lower average incomes compared to homeowners, making rents consume a larger portion of their earnings.

“The Barometer shows [renters] have around £193 left at the end of the month, compared to those with mortgages who have £353 left. As a result, fewer than half of renters have enough savings put aside – compared to almost three-quarters of mortgagees,” Coles added.

She also highlighted the long-term implications for renters’ retirement prospects, with only 18% on track for a moderate retirement income, compared to better figures for homeowners and outright owners.

Coles advises immediate personal financial planning to mitigate these challenges: “Anyone who has not yet drawn up a budget of everything coming in, and everything they’re spending needs to get cracking.

“It feels like boring admin, but after your income has been squeezed for so long, you will have done the easy cost-cutting things that spring to mind. We’re now at the stage of digging deeper for savings.”