Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

ONS: Mortgaged Households Face Highest Five-Year Inflation Due to Rising Rates

Homeowners with mortgages have experienced the highest cumulative inflation over the past five years compared to other tenure types, according to the latest Household Costs Indices report from the Office for National Statistics (ONS). The report found that mortgaged households saw inflation of 37.6% during this period, with higher mortgage interest rates being a significant contributing factor.

By comparison, private renter households experienced the lowest cumulative inflation at 30.7%, followed by outright owner-occupiers at 32.4%, and social and other renters at 33.9%. The ONS report highlights that while mortgaged households have faced the steepest inflation over five years, this trend has eased recently.

In March, the annual inflation rate for mortgagors and outright owner-occupiers was lower than at the end of the previous year and was the lowest among all tenure types. Specifically, mortgagors saw their annual inflation rate fall from 3.7% in December to 3.6% in March, while outright owner-occupiers experienced a slight increase from 3.4% to 3.6%. Private and social and other renter households both recorded an annual inflation rate of 3.7% in March, down from 3.8% and 3.9% respectively.

The report also detailed the factors contributing to inflation for different tenure types. For mortgaged households in March, mortgage interest payments added 0.37 percentage points to the annual inflation rate, while food and non-alcoholic beverages contributed 0.4 percentage points. Both figures were down from 0.5 percentage points in December. These decreases were offset by higher contributions from electricity, gas, and other fuels, as well as motor fuels.

For outright owner-occupiers, electricity, gas, and other fuels added 0.29 percentage points to annual inflation in March, up from 0.12 percentage points in December. This group also saw an increase in the contribution from motor fuel, rising from 0.03 to 0.16 percentage points between December and March. However, this was partially offset by a smaller contribution from food and non-alcoholic beverages, which fell from 0.59 to 0.49 percentage points over the same period.

These findings are relevant for letting agents and inventory clerks monitoring cost pressures on tenants and landlords, as inflation trends can impact affordability and rental market dynamics.