In October the energy price cap will rise by 80% from £1,971 to £3,549 – a fresh blow to those struggling with the rising cost of living.
Surging energy costs are caused by Russia restricting oil and gas supplies to Europe, as well as the UK government’s inaction with regard to controlling energy costs.
Indeed, in July 2022 people in the UK were paying more for energy than the entirety of the rest of Europe, with the exception of the Czech Republic.
France has been far more interventionist, as it forced the country’s state-owned energy provider EDF to limit electricity wholesale price rises to 4% a year.
Richard Tugwell, director of mortgage distribution at Vida, said: “These price hikes are affecting those on lower incomes the hardest.
“74% of keyworkers who don’t own their own home worry that they will never be able to, and the rising household bills will no doubt add to their concerns.
“It is more important than ever that the government steps in to provide support for these low-income families, as well as key workers who were the backbone of our country during the Covid-19 pandemic.
“As a responsible lender we will continue to work with our broker partners to focus on the most affordable solutions for their clients.”
Jamie Lennox, director at Dimora Mortgages, added: “This huge increase is certainly going to result in lenders reviewing their affordability calculators in the coming weeks.
“We’ve already seen signs of this happening. 10 days ago we checked affordability with one lender and, as of today, they are now offering £8,000 less on the maximum people can borrow.
“These price increases will certainly make buyers think more about moving and what type of property to buy with a greater emphasis on looking at the Energy performance Certificate of the property. Some will end up ruling out moving house or ignore a whole type of property that are deemed less energy efficient.”