x
By using this website, you agree to our use of cookies to enhance your experience.

TODAY'S OTHER NEWS

Cost-of-living crisis – will it start to reduce the number of active buyers?

The cost-of-living crisis has been dominating the news headlines for some months now, but new research has revealed the extent to which it is having an impact on household finances.

According to Legal & General’s Rebuilding Britain Index, released yesterday, the UK’s cost of living crisis – which has been worsened by the war in Ukraine and rampant global inflation - will lead to almost 70% of the UK making additional cutbacks on household spending.

What’s more, the report points out that the cost-of-living crisis is increasing the inequalities between different parts of the country and placing the oft-talked about levelling up agenda – a key part of Boris Johnson’s premiership - at risk.

Extra pressure on household finances could start to seep through into the property market, with buyers less willing to move/borrow. There have already been signs in recent months that the market is finally starting to slow, with fewer buyers competing for homes.

Sir Nigel Wilson, Legal & General chief executive, has called on the new government – which will be led by either Rishi Sunak or Liz Truss - to address the root of regional inequalities. He argues that the private sector has a crucial role to play ‘in levelling up by investing in new homes, high wage employment, through skills training and green energy initiatives’.

The L&G report found that 13% of respondents feel they would have nothing left to cut back on in the face of future energy price increases. Meanwhile, a further 69% said they are being forced to make additional cutbacks on their household budgeting.

As is often the case, lower income households are more severely affected by the cost-of-living crisis, as they spend a greater proportion of their income on living costs. The report showed that more than one in four (28%) with household income of less than £20,000 would be unable to cope with further energy price increases.

Worryingly, the research also highlighted that nearly half (49%) of UK households are concerned about being able to keep up with rent or mortgage payments over the next 12 months. This rises to 64% of households with dependent children.

On the whole, respondents suggested that long-term solutions – for example investment in energy efficient homes and offices (62%) and the creation of higher wage employment (54%) - are the most attractive solutions to tackling the cost-of-living crisis, as well as immediate financial support from the government.

icon

Please login to comment

MovePal MovePal MovePal
sign up