Over a third of homeowners fear an interest rates hike in the UK because it will stretch the affordability of their monthly mortgage repayments.
Homebuyers in the UK have been helped by the Bank of England's all-time-low base rate of 0.5%, which has brought down interest rates on mortgages. It has sat at this historic low since 2009 to keep credit cheap and banks lending while the economy struggled.
But the UK economy is now healing and set to grow by as much as 3% in 2014. As a result, the Bank of England has indicated it will start to lift its base rate, albeit gradually, in 2015 – pushing up mortgage rates with it.
A survey conducted by YouGov, on behalf of conveyancing firm myhomemove and consumer body the HomeOwner Alliance, found that 34% of UK homeowners are worried about rising interest rates. And this increases to 49% of homeowners between the ages of 25 and 34.
The poll of more than 1,600 homeowners also found that first-time-buyers were relying heavily on low interest rates, help from parents and schemes such as Help to Buy to get them their initial step on the property ladder.
This is because a severely constrained supply of homes and spiralling demand is forcing up house prices in all regions of the UK, steadily putting home ownership out of reach for many on middle and low incomes, particularly in London and the south east.
According to the Office for National Statistics (ONS), the average price a UK home rose by 8% in the year to March 2014, hitting £252,000. In London the rise was even more acute at 17% to £459,000.
"As house prices rise and homeownership levels drop, young people are left with no choice but to resort to desperate measures to realise their dream of owning their own home," said Paula Higgins, chief executive of the HomeOwners Alliance.
"This goes to show how the housing crisis is giving young people a raw deal. Schemes to help make homes more affordable in the short term do little to solve the fact that we need many more new homes, in the right places and at the right price."
RBS has raised concern about the level of household debt in the UK ahead of an impending hike in interest rates.
"Rising house price inflation, normalising credit conditions, a dovish monetary policy stance/signalling and specific policies to spur the housing market all point to a re-leveraging by UK households," said Ross Walker, UK economist at RBS.
"Given the still-bloated levels of household debt, two-thirds of which is tied to variable rates, and the rather subdued prospects for income growth, financial stress is likely to increase as monetary policy is normalised.
"We do not expect a system-wide crash as per the early-1990s, but a rising debt-servicing burden seems likely to exert a sustained squeeze on demand and wreak significant damage to pockets of acute exposure."