Homeowners already suffering higher interest rate costs are also becoming concerned about their job security...

According to figures from the consumer barometer by Lloyds TSB Corporate Markets, 80 per cent of consumers are expecting interest rates to rise further next month, with just 12 per cent saying that they expected rates to remain at 5.5 per cent.

And this is having an effect on job security, with just 18 per cent of consumers saying that they felt more secure in their jobs that at the same time last year - the lowest figure of the last 12 months.

The worry is that as consumers cut back on spending, many companies will see their profits hit - forcing them to cut jobs.

"Consumers have been holding their breath waiting for another interest rate rise and the majority obviously see it as a fait accompli," said Trevor Williams, chief economist at Lloyds TSB Corporate Markets.

"However, the combination of interest rate hikes and consumers' correct expectation that prices are on the rise means the spectre of unemployment is now beginning to weigh more heavily on respondents."

‘The slowdown has begun’

The UK's leading fast purchase property firm, National Homebuyers says that there will come at time soon when property owners are forced to sell.

"Annual mortgage payments are already £1,200 higher than this time last year," says director Julian King.

"Not only should homeowners worry about the cut in consumer spending but the likelihood of the current slowdown turning into a crash.

"The slowdown has begun and a crash is long overdue, meaning that many financially stretched homeowners will not have a viable exit plan in the sale of the property."

Source: National Homebuyers