“Over the past 15 years, since the previous crash, we have been on fairly low interest rates. Anyone that’s had a mortgage in the past 10 years would never have seen these rates.
“There was a false sense of security that rates may never rise. People then took loans, cards and debts. Now the cost of living has spiralled and they can’t afford to repay it.”
But some brokers have been quick to point out that unlike other demographics, the middle class have far more lifelines to draw on in times of hardship.
“Yes the middle class do stretch themselves as it’s the ‘keeping up with the Jones’s’,” said mortgage sales head at London Mortgage Partners, David Gissing.
“But they typically can pull strings, family, as well as more savings and investments to get by.
“Lower income households and those who are working class don’t have those luxuries or such access to support.”
Harmony Financial Services director, Imran Hussain, also said mortgage interest rate rises will impact everyone - both the middle class and working class.
“Casual workers, those who work through agencies or on shorter-term and flexible employment terms - they’re going to be in trouble if they are laid off,” Hussain explained.
“Families with two workers, or someone with two different revenue streams, are going to be fine,” he said, recalling a conversation with a client who is both a nurse and a make-up artist.
“One industry might slow while the other is busy. But households reliant on one income, they will always be financially stretched.”
ruby.hinchliffe@ft.com
