Rising Mortgage Costs and Young People's Finances

Money Box

BBC

Business

4.2 • 825 Ratings

🗓️ 22 July 2023

⏱️ 25 minutes

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Summary

Rising interest rates are putting pressure on those homeowners with variable mortgages, or with fixed terms due to end this year. The Chancellor Jeremy Hunt has met with the big banks to discuss the forbearance options lenders can offer to customers in difficulty. We discuss the long term financial implications of options such as payment deferrals, extending the length of the mortgage or switching to interest only with Sarah Coles, Head of Personal Finance at Hargreaves Lansdown.

The children's charity Barnardos is concerned about the impact of rising living costs on young people aged 18-25. The charity worked with the Co-op to survey 2,500 people in that age bracket. Almost 9 in 10 responded that having enough money to cover basic needs was considered 'aspirational', and more than half had worried about whether they could afford things in the last six months. We speak to a 20 year old care leaver about their relationship with money.

And what should you do to protect large sums of money from fraud? We've been contacted by listeners in the process of buying and selling a house, wondering where to keep large sums safe until they're ready to make their purchase. Reporter Dan Whitworth has the answers.

Presenter: Felicity Hannah Reporter: Dan Whitworth Researcher: Sandra Hardial Editor: Beatrice Pickup

Transcript

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0:00.0	On a winter's night in 1974, a crime took place that would obsess the nation.
0:07.0	It was an extraordinary news story.
0:09.0	The story of an aristocrat, Lord Lucan, who's said to have killed the family Nanny,
0:14.0	mistaking her for his wife, then somehow just disappeared.
0:18.0	One of the great mysteries in English criminal history. We're still looking for Lucan.
0:21.6	It's honestly one of the most powerful stories of my lifetime.
0:25.6	I'm Alex von Tundselman.
0:27.6	This is The Lucan Obsession.
0:28.6	Listen on BBC Sounds.
0:31.6	BBC Sounds, music, radio, podcasts.
0:35.6	Hello, welcome to this Moneybox podcast. Big, big changes for mortgages, which we will talk about in just a moment.
0:43.6	Plus, a Moneybox listener wants to know how to keep the proceeds from a house sales safe.
0:48.5	We'll have some answers.
0:49.9	And what does the rising cost of living mean for the UK's young adults?
0:53.8	A startling new study
0:54.8	suggests they're pretty worried about simply affording food. I worry about money all the time.
0:59.4	It's definitely one of my biggest fears, not being able to be financial skill. But first,
1:04.0	those mortgage rate rises and the new flexibility being offered by banks. It was a pretty
1:10.3	brutal week for anyone with a mortgage after the Bank of England put base rate up to 5%, hitting people on variable rates or who need to remortgage. And remember, the average deal coming to an end this year was originally fixed at less than 2%. Now a typical two-year fixed mortgage deal is more than 6%. That is a heck of a jump.
1:31.8	And the banks know it. Chancellor Jeremy Hunt called them in on Friday and thrashed out some ways to help homeowners who are struggling with rising mortgage costs.
1:40.2	It will be possible to temporarily extend your mortgage term or switch to interest only for a period
1:45.8	with no questions asked and no harm to your credit score.
	...

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