A RISING number of euro-area consumers is struggling to pay for housing after years of above-target inflation and surging borrowing costs, according to European Central Bank research.

The share of lower-income households expecting to make late payments for utilities or rent rose to more than 20 per cent in the first quarter from about 15 per cent in 2023, ECB researchers Omiros Kouvavas and Desislava Rusinova said on Monday (Apr 22) in a bulletin article. For mortgage payments, it nearly doubled to 30 per cent.

“Given the present and future effects of both increased interest rates and loss of purchasing power owing to inflation, the ability of households to meet their housing-related costs and mortgage payments is a source of concern,” the article said.

Interest-rate hikes to curb inflation have weighed particularly on the property market, where new investments have fallen. That’s increased pressure on the rentals, which were tight in many European cities even before the spike in inflation.

The ECB is likely to start lowering rates in June, with several Governing Council members and many politicians in the region concerned that tight monetary policy is holding back the 20-nation economy excessively. BLOOMBERG