As families across the UK grapple with soaring mortgage costs, the fallout from Liz Truss’s controversial mini-budget is becoming increasingly apparent. With financial pressures mounting, many Brits are finding that the dream of a summer holiday is slipping further out of reach.
The latest analysis reveals that over 38,000 households are facing significant increases in their mortgage payments, leaving them to question whether they can afford even the most basic leisure activities.
Truss, who served as Prime Minister for just 49 days—the shortest tenure in British history—has left a lasting impact on the economy.
Gaynor Heys, a 47-year-old fashion industry professional originally from Manchester, is one of many grappling with skyrocketing mortgage payments. After recently switching to a variable rate mortgage, her monthly costs have soared from £1,200 to £1,950—an eye-watering increase of £750. “My life has become much more stressful since I switched,” Gaynor explained. “I feel like I’m living under a dark cloud, and I’ve written off any chance of taking a holiday this year.”
With the rising costs, Gaynor now questions whether she can even afford to visit family by train, with fares exceeding £100. Forced to dip into her savings, she finds herself with little disposable income left. “I’ve always been good with money, but the past 12 months have been filled with stress and worry,” she said. “Everything has a black cloud over it at the moment.”
New analysis from Nous.co reveals that nearly 38,000 households who took out two-year fixed-rate mortgages just before Truss’s economic policies took effect are facing similar challenges. Originally secured at an average rate of 2.59%, these homeowners will now refinance at an average rate of 4.97%. For a typical £200,000 mortgage, this translates to monthly payments rising by £259—from £906.33 to £1,165.69—leading to an annual increase of over £3,000, equivalent to the cost of a ten-day family holiday to Spain.
Megan Noble, a 50-year-old from Walkerdone in Newcastle upon Tyne, shares a similar story. After being advised to switch to a standard variable rate mortgage (SVR) to lower her payments, she now finds herself facing an astronomical interest rate of 8.1%. Her monthly payments have increased by £481 over the past 11 months, leaving her with little room to maneuver. “I live a pretty frugal life, but I’ve had to cut back on treats like meals out and even cancel piano lessons, which I really enjoyed,” Megan remarked.
Greg Marsh, CEO of Nous.co, emphasized the financial burden these families are experiencing. “They may have thought they avoided the worst of the mini-budget mortgage nightmare, but they’re about to be hit by a Truss timebomb,” he said. “This could cost them the equivalent of a family holiday.”
As families like Gaynor’s and Megan’s navigate this difficult landscape, experts urge homeowners to seek professional mortgage advice to better manage the refinancing process. The analysis serves as a stark reminder of the ongoing impact of political decisions on everyday lives, as countless families face the reality of tighter budgets and diminished opportunities for leisure. For many, the dream of a holiday is slipping further out of reach, underscoring the urgency for solutions in a challenging economic climate.
