The warning comes as the number struggling to pay mortgages could hit a 15-year high, warns Bank of England.
"However, as lenders have been a lot more cautious through this cycle, with high loan-to-value mortgages accounting for a much smaller share of the lending book than in the past, this should help to limit the adverse impact on the market."
The promise of huge, unfunded tax cuts led to expectations that the Bank will have to raise interest rates more aggressively than previously thought, and mortgage providers are pricing their loans accordingly. Currently it says around 1.7% of UK households - or 475,000 - are in a position where they are more likely to experience repayment difficulties. It defines that as having to spend more than 70% of their take-home pay on mortgage or rent and essentials.
"Rises in the cost of living and interest rates will increase pressure on UK household finances and make households more vulnerable to shocks,""Some may find it harder to repay debts," it added, unless they can make significant spending cuts.
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