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 Mortgage holders are expected to feel the pinch in the coming months as the interest rate hikes take hold.
That is the view espoused in the latest Ernst & Young ITEM Club Summer forecast, a system which uses the Treasury's own model of the UK economy.
Analysts predict that ongoing economic strength will put pressure on the monetary policy committee to increase the base rate further still.
With the base rate widely tipped to push beyond six per cent this year Peter Spencer, chief economic advisor to the Ernst & Young ITEM Club, said it would be a balancing act for the MPC to ensure it kept inflation in line without undermining the economy.
"The bank has acted forcefully, but it now needs to be careful not to squeeze the UK economy too hard.
"The MPC needs to rebalance the economy and cool the housing and financial markets, without jeopardizing exports."
With household tax payments also set to increase – by 9.8 per cent in the year to the first quarter – ITEM is predicting there could be a period of belt-tightening for homeowners as they try to cope with increased mortgage payments alongside other expenditure.
"There are around two million people on fixed mortgages which expire later this year," he said.
"When they took out their fixed-term mortgage, base rates were around 4.5 per cent; when the term comes to an end rates will be six per cent – that’s a big hike and that will put a real dent in people's pockets."
The base rate is currently at 5.75 per cent.
Julian King from National Homebuyers says, "Those exiting their current agreement wll be in for a big shock".
"Those unable to afford a mortgage on with the 6% interest rate will be seeking to sell their property. This presents further problems for the homeowner.
"25% of all property buyers are now 'off the radar', these are first-time buyers who are unable to enter the market.
"The effect is continued dramatic increase in the volume of repossessions".
National Homebuyers are the UK's leading fast property buyers, guaranteeing to make an offer on any property surveyed for homeowners who need to achieve a quick sale.
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