Investments  

Cash Isa take-up slumps amid cost of living crisis

InvestingReviews.co.uk chief executive Simon Jones said: "It's taken a long time, but finally the message is getting through to people that cash ISAs offer no protection against the corrosive power of inflation.

Householdfinances

This came as UK Finance published its own set of figures for the first quarter of 2022, as part of its Household Finance review, which suggested mortgage application activity was still performing in line with pre-Covid levels, and remortgaging appeared robust. 

However, Just Mortgages's national operations director, warned this outlook could change significantly. 

John Phillips said: “What these figures don’t yet show is the recent shake-up in household budgets with interest rates, fuel, energy, and food costs all rising steeply and eating away at take home pay especially for lower-income families and typically first time buyers.

"The chancellor has warned that interest rates are expected to rise to 2.5 per cent by the end of the year and, with the cost of living rising rapidly, complying with affordability conditions will become increasingly difficult."

Phillips said Just's brokers have reported that competition for houses remains "very high", and borrowers' key concerns are securing a mortgage offer and having the ability to proceed when they find the house they want.

However, he added: “In the remaining half of 2022, mortgage demand should remain strong as borrowers look to secure a competitive purchase or re-mortgage deal before inevitable rate rises.

"And, with reducing housing stock, the speed of offer could overtake rate as the most important factor to borrowers. Professional mortgage advice looks set to be more important in 2022 than for many years previously."

simoney.kyriakou@ft.com