“We expect to see a growing cohort of customers locked out of the mainstream mortgage market.”
The lender’s own research in December of 1,003 UK adults who were either self-employed, had a blip in their credit score or no credit score, found nearly a quarter (23 per cent) had been turned down for a mortgage.
Consumers borrowed an additional £1.3bn in credit, on net, in March, of which £0.8bn was new lending.
Chartered financial planner at Quilter, Rosie Hooper, highlighted a "stark difference" in consumer behaviour over the past year.
She said: "In Q1 2021, £3.6bn of credit card debt was repaid, while in Q1 2022, £2.1bn was loaded onto credit cards as debt."
Fintech lender and mortgage adviser Habito’s chief financial officer, Martijn van der Heijden, said “all signs” were pointing to another rate rise tomorrow.
“UK inflation was at 7 per cent in March - the highest level since 1992, but this was before April’s 54 per cent hike in Ofgem’s energy price cap is included in calculations,” she explained.
“Inflation is likely to be higher now, and this will put yet more pressure on the Bank of England to act again.”
The average standard variable rate (SVR) mortgage ticked up by 0.10 per cent to 4.71 per cent in April, to reach a two-year high, according to Moneyfacts.
For the majority (74 per cent) of borrowers on a fixed rate deal, a base rate rise will not lead to an immediate financial hit.
That said, Heijden reckons if the Bank did need to raise rates again - and financial markets believe this could happen over the summer - when clients on fixed rates do come to remortgage, they could see mortgage prices higher than where they are now.
ruby.hinchliffe@ft.com
