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Britain is facing a deepening “mortgage crunch”, with households already wrestling with the cost of living crisis facing yet a further squeeze on their budgets.

It has been warned that those renewing their property loans next year will end up paying out on average an extra £2,900 annually.

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But what is driving soaring costs, will it get worse before it gets better – and what can you do if you are struggling?

Sky News looks to answer your questions.

Why have mortgage rates been increasing?

The government and the Bank of England (BoE) are under pressure to tackle prolonged high inflation, which has led to hikes in everyday prices, most notably for food.

The main tool available to the Bank to control this is interest rates.

Raising it makes it more expensive for people to borrow money and encourages them to save, meaning overall they spend less, helping to cool prices and lower inflation.

But it means loans, such as mortgages, become more expensive to take out.

Laith Khalaf, head of investment analysis at AJ Bell, summed it up when he pointed out the BoE is “caught between a rock and a hard place, as it has to choose between pushing more mortgage borrowers towards the brink and letting inflation run riot”.

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‘No alternative’ to interest rate rise

The current bank rate stands at 4.5% after climbing 12 times in a row.

Some variable rate mortgages directly track this and automatically increase in line with it.

Borrowers can also end up on a standard variable rate when their initial mortgage deal ends. While set by lenders, it often follows movements in the base rate.

Most homeowners tend to take out fixed-rate deals, the pricing of which have also been rising given expectations around inflation, which eased back far less than expected in April, hitting 8.7%.

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Careworker sees monthly mortgage payments rocket

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Is there more pain to come?

Given many people are on fixed rates, they are yet to feel the impact of recent mortgage rate hikes.

But around 1.3 million households are expected to reach the end of their fixed-rate term from April to the end of the year, the BoE said last month.

Analysts point out the majority of these were set at interest rates below 2%.

Ahead of a BoE base rate decision next week, with experts predicting a 13th increase to 4.75%, fixed mortgages have already been on an upward march, with some major lenders temporarily pausing applications and increasing their rates.

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The average two-year deal was nudging 6% on Friday, according to financial information website Moneyfactscompare.co.uk.

The Resolution Foundation think-tank expects the average two-year fixed-rate mortgage will not fall below 4.5% until the end of 2027.

The average mortgage holder is looking at a £200 increase in their monthly repayments if their rate goes up by three percentage points.

What help is available if I am struggling with my payments?

The advice is to speak to your lender as early as possible.

They may be able to suggest various options to keep monthly payments more manageable, although some, such as extending the mortgage term, may mean paying more over the longer term, so any decision needs to be weighed up carefully.

If you are coming to the end of a mortgage, a broker could help with finding a deal that is right for you.

Sam Richardson, deputy editor of Which? Money, said: “Mortgage lenders are obliged to offer support to their customers, so those struggling to meet mortgage payments should speak to their lender about what help is available.

“Doing so will not affect your credit rating. Further support may come in the form of temporary break from payments, interest-only repayments or extending the term of the mortgage.

“If you’re entitled to benefits such as universal credit, you may be able to apply for the government’s support for mortgage interest loan scheme.”

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UK ‘moving at glacial pace’ on national plan for defending foreign attack, say MPs

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UK 'moving at glacial pace' on national plan for defending foreign attack, say MPs

The UK lacks a national plan to defend itself from attack and is moving at a “glacial” pace to fix the problem despite threats from Russia and China, a report by MPs has warned.

With the whole country needing to understand what it means to be ready for war, the Defence Select Committee also said it had seen no sign of a promised “national conversation on defence and security” that was launched by Sir Keir Starmer in June.

Sky News and other journalists were even blocked on Monday from interviewing sailors aboard HMS Prince of Wales, the Royal Navy’s flagship aircraft carrier, in direct contrast to the prime minister’s stated aim of greater engagement.

Royal Navy aircraft carrier HMS Prince of Wales. File pic: AP
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Royal Navy aircraft carrier HMS Prince of Wales. File pic: AP

Public needs to know ‘what to expect’ from war

“We have repeatedly heard concerns about the UK’s ability to defend itself from attack,” said Labour MP Tan Dhesi, chair of the committee.

“Government must be willing to grasp the nettle and prioritise homeland defence and resilience.

“In achieving this, government cannot shy away from direct engagement with the public.

“Wars aren’t won just by generals, but by the whole of the population getting behind the Armed Forces and playing our part.

“There needs to be a co-ordinated effort to communicate with the public on the level of threat we face and what to expect in the event of conflict.”

The Royal Navy tracked a Russian submarine in UK waters last month.  Pic: Royal Navy/MOD
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The Royal Navy tracked a Russian submarine in UK waters last month. Pic: Royal Navy/MOD

‘The Wargame’ made real?

The findings of the report support a podcast series by Sky News and Tortoise Media called The Wargame – released in June.

It simulated a Russian attack on the UK and played out what the impact might be for the country in the absence of a credible, resourced and rehearsed national defence plan – something Britain maintained rigorously during the Cold War.

Sky News first revealed in April 2024 that the previous government no longer had such a plan, though work was under way to develop one.

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Flagship aircraft carrier to be placed under NATO command

Report’s assessment of war-readiness

The Defence Select Committee report – based on a nearly year-long inquiry – found: “The UK lacks a plan for defending the homeland and overseas territories with little progress on the Home Defence Programme.”

It said this meant the government was failing to meet a fundamental commitment to the NATO alliance – the Article 3 requirement to maintain the “capacity to resist armed attack”.

The report quoted Luke Pollard, a defence minister, acknowledging that “we have been very clear that we are not satisfied with Article 3 in the UK”.

Britain's new Ajax fighting vehicle, which arrived overdue and at great financial cost. Pic: PA
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Britain’s new Ajax fighting vehicle, which arrived overdue and at great financial cost. Pic: PA

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Yet the MPs’ report added: “Despite this recognition from government… measures to remediate seem to be moving at a glacial pace.”

It said: “Cross-government working on homeland defence and resilience is nowhere near where it needs to be. The government has said repeatedly that we are in an era of new threat, yet decision-making is slow and opaque.”

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The rebuke from the MPs was published as John Healey, the defence secretary, prepares to announce that 13 sites across the UK have been identified as possible locations for at least six new weapons factories.

“This is a new era of threat,” he will say at a speech in Westminster later.

“We are making defence an engine for growth, unambiguously backing British jobs and British skills as we make the UK better ready to fight and better able to deter future conflicts.

“This is the path that delivers national and economic security.”

Industry will be invited to submit proposals to produce ammunition and explosives, with the Ministry of Defence saying it hopes work on the first factory will begin next year.

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Ultra-processed foods leading cause of ‘chronic disease pandemic’, say experts

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Ultra-processed foods leading cause of 'chronic disease pandemic', say experts

Ultra-processed foods (UPFs) are a leading cause of a “chronic disease pandemic” linked to worsening diets, experts have warned.

UPFs include items such as processed meats, some ready meals and cereals, ice cream, crisps, biscuits, mass-produced bread and fizzy drinks.

They often contain a high level of saturated fat, salt and sugar – as well as additives such as sweeteners and preservatives.

UPFs leave less room for more nutritious foods and are also believed to negatively affect gut health.

Forty-three scientists and researchers have now sounded the alarm and accused food companies of putting “profitability above all else”.

Writing in The Lancet, they said the firms’ economic and political power is growing and “the global public health response is still nascent, akin to where the tobacco control movement was decades ago”.

They warned that while some countries have brought in controls on UPFs, policy is lagging due to “co-ordinated efforts of the industry to skew decision-making, frame policy debates in their interest, and manufacture the appearance of scientific doubt”.

Professor Chris Van Tulleken, from University College London, one of the authors, said obesity and diet-related disease had increased in line with a “three-decade history of reformulation by the food industry”.

“This is not a product level discussion. The entire diet is being ultra-processed,” he warned.

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However, several experts not involved with the article urged more research, cautioning that existing studies had shown a link with poor health and UPFs but not established causation.

Kate Halliwell, chief scientific officer at the Food and Drink Federation (FDF), which represents the industry, said companies had made a “series of changes over many years to make the food and drink we all buy healthier, in line with government guidelines”.

She said FDF-member products now contained a third less salt and sugar and a quarter fewer calories than in 2015.

Previous studies cited by the British Heart Foundation have linked UPFs to a greater risk of heart disease, stroke, and early death.

A 2023 meta analysis in the PubMed journal said evidence suggested an association between UPF intake “and the risk of overall and several cancers, including colorectal, breast and pancreatic cancer”.

Get cancer symptoms checked, charity urges

It comes as Cancer Research UK warned too many Britons are putting off getting potential symptoms checked.

A poll for the charity suggested the top reasons people delay getting potential signs of cancer checked is because of a lack of GP appointments, or thinking their symptoms might not be serious.

More than half (53%) of the 6,844 surveyed said they were put off as they believed getting seen would be difficult, while 47% said they actually had found it difficult to get an appointment.

Some 44% put it off as they though the symptom wasn’t serious, 41% believed they could manage things themselves, and 40% didn’t want to be seen as making a fuss.

Cancer Research UK said it had now trained Tesco pharmacists to spot possible cancer signs – and that people can speak to them in private if they needed.

The pharmacists will be able to give advice on next steps and whether a GP appointment is recommended.

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Scotland secure men’s World Cup spot for first time since 1998 after beating Denmark

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Scotland secure men's World Cup spot for first time since 1998 after beating Denmark

Scotland secured a place at the men’s World Cup for the first time since 1998 as stoppage-time goals by Kieran Tierney and Kenny McLean secured a thrilling 4-2 win over Denmark at Hampden Park.

Scott McTominay’s spectacular third-minute bicycle kick had given the hosts a half-time lead.

Rasmus Hojlund equalised for the Danes in the 57th minute shortly before Rasmus Kristensen was sent off, but Lawrence Shankland restored Scotland’s advantage.

When Patrick Dorgu brought Denmark level again with nine minutes remaining, it seemed they would claim the point needed to top the group and book their place at next year’s tournament in the US, Canada, and Mexico.

However, Tierney fired an unstoppable shot past Kasper Schmeichel in the third minute of stoppage time

And then, with the Denmark goalkeeper up in attack at the other end of the pitch, McLean hit a long-range effort from his own half to spark delirious scenes.

Scotland's Kenny McLean celebrates scoring his side's fourth goal against Denmark. Pic: PA
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Scotland’s Kenny McLean celebrates scoring his side’s fourth goal against Denmark. Pic: PA

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The victory saw Scotland top Group C and secure automatic qualification for the 2026 World Cup.

Head coach Steve Clarke had already led his country to back-to-back European Championships.

He told the BBC: “Scott McTominay scored the best overhead kick I’ve ever seen, and it might not have been the best goal of the night!”

Scott McTominay celebrates scoring the opening goal for Scotland. Pic: Reuters
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Scott McTominay celebrates scoring the opening goal for Scotland. Pic: Reuters

Scotland captain Andy Robertson dedicated the victory to his former Liverpool teammate Diogo Jota, who died earlier this year in a car accident.

He told the BBC: “We certainly put the country through it, but I’m sure it will be worth it.”

“I couldn’t get my mate Diogo Jota out of my head today,” he added. We spoke so much together about the World Cup. When he missed out in Qatar through injury and I missed out when Scotland never went.

“We always discussed what it would be like going to this World Cup. I know he’ll be somewhere smiling over me tonight.”

The draw for the 2026 World Cup will take place in Washington on 5 December.

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