Homeowners 'struggling financially

British homeowners are feeling the strain of five base rate increases, research revealed today.

Some 17% of mortgage holders said they were already struggling financially because of increases in interest rates, while a fifth said that an increase in monthly mortgage payments of just ?40 would push them into difficulties.

A further quarter point interest rate increase would add ?21.

Half of those homeowners who took part in an online survey by YouGov for broker Purely Mortgages said they had already had to make changes to their lifestyle to meet mortgage repayments, with 14% saying they had cancelled holidays and a third saying they had cut back on luxuries like clothes and gadgets.

The report echoes the comments made yesterday by the Royal Institution of Chartered Surveyors, which said that potential buyers were being scared out of the market by higher borrowing costs and fears that the property market could be heading for a crash.