More than half of homeowners say affordability is the biggest issue facing the property market this year as they worry over rising living costs, data from The Mortgage Lender shows.  

The specialist lender says 55% of homeowners are concerned about their ability to buy a home “leading to a cooling off period in the market”.  

It points to December transactions falling 3% on the previous month, albeit in a traditionally quieter period, according to HMRC figures last month, “as high interest rates and the cost of living impacted buyer’s plans”.

The lender’s report comes after the Bank of England raised the base rate last week to 4% from 3.5%, the 10th hike in a row, as it attempts to calm inflation at 10.5%, which is more than five times above the central bank’s 2% target.  

The survey says 43% of homeowners are concerned about the instability of the UK economy, while a further 48% are worried this will result in higher mortgage payments.  

It adds that affording household bills was the top priority for 37% of homeowners, followed by keeping up with mortgage payments for 21% of this group. A further 15% were worried they would not be able to move to a better property or area in the future.   

Limited supply in the market is a worry for 13% of property owners, the cost of construction services and goods, for 12%, while improving home energy efficiency concerns 16% of this group.  

Many homeowners would like to see government support the property market, the poll says.  

It finds that 34% want more cost-of-living support from the government, while 30% would like to see more support for green home improvements.   

It adds that 39% want to see interest rates lowered to help cut monthly mortgage payments, while 22% also want to see more help for first-time buyers to get onto the property ladder.  

The Mortgage Lender chief commercial officer Steve Griffiths says: “The cost of living continues to dominate the minds of consumers as many worry, not only about their current financial situation but also what it will mean for their future property plans.   

“While house price growth may be slowing, inflation and interest rates are higher than many will have seen in their lifetimes.   

“This combined with limited wage growth means that the affordability gap is widening, and moving onto or up the property ladder remains a significant challenge.   

“While there is light on the horizon with mortgage rates starting to come down, they will for some time be higher than many have been used to.”  

The Mortgage Lender’s poll surveyed 2,000 UK adults between 6 and 10 January.