A fifth of homeowners are considering moving somewhere cheaper due to the cost of living crisis, KPMG has revealed.
The firms latest, Consumer Pulse survey, which tracks how more than 3,000 consumers across age and income groups and UK regions are responding to the cost of living crisis, found many are taking action due to high mortgage rates.
Its research found that among 1,096 homeowners, 22% were considering selling and moving to a cheaper home, while 8% already have.
Another 18% have used savings to reduce their mortgage balance and a quarter are considering this, while 16% have switched to interest only terms and 24% may do so.
A quarter said they are considering lengthening their mortgage term, while 12% already have,
Responding to the findings, Linda Ellett, UK head of consumer markets, retail and leisure for KPMG, said: “Whether it’s switching to interest-only mortgages, lengthening mortgage terms, reducing pension contributions, or selling property to move to something cheaper – this higher interest rate environment is causing between 10 to 20% of mortgage holders that KPMG surveyed to take significant steps to manage these higher costs.
“Up to a further quarter of people surveyed are also considering taking such measures, likely only waiting for when their fixed-term deal ends.
“Inevitably, increased household budget and savings being used to pay the mortgage, or higher rent cost, will continue to lead to less money being spent elsewhere within the economy by consumers, which will continue to challenge both retailers, brands and leisure businesses.”
It comes as average mortgage rates for a five-year fix fell below 6% for the first time in months yesterday, albeit to just 5.99%.
Simon Gammon, managing partner at Knight Frank Finance, said: "Lenders continued to cut mortgage rates in the wake of better inflation figures and the Bank of England's decision to hold the base rate at 5.25% this month, which will do a lot to improve sentiment in the property market.
"We do expect more, marginal cuts during the weeks ahead, but that will soon reach a plateau. The best fixed rate deals already start with a four, and we expect rates to settle in that range until the Bank of England opts to cut the base rate, which is unlikely before next spring at the very earliest."