With interest rates now at 5%, Labour has set out a five-point plan today to ease the hit from soaring mortgages and halt repossessions in Stockport.
It comes as the party releases new figures showing mortgage rates are higher in the UK than in other advanced economics – leaving households in Britain paying more in mortgage payments than households in Germany, France, the Netherlands and Ireland.
That gap in mortgage rates with our neighbours is costing a typical household in Britain £1,000 more in mortgage payments.
It comes as figures reveal the average mortgage costs will be going up by a crippling £2,900 per year, and growing news of mortgage deals being withdrawn by banks.
The party set out its five-point plan to ease the Tory mortgage penalty, calling on the government to urgently adopt their plan and introduce measures:
- Requiring lenders to allow borrowers to switch to interest only mortgage payments for a temporary period.
- Requiring lenders to allow borrowers to lengthen the term of their mortgage period.
- Requiring lenders to reverse any support measures when the borrower requests.
- Requiring lenders to wait a minimum of six months before initiating repossession proceedings.
- Instructing the FCA to urgently issue consumer guidance stating that borrowers making temporary switches to interest only mortgage payments and lengthening the term of their mortgage period should not see their credit score affected.
Labour have also said they would bring in a Renters’ Charter ending ‘no-fault’ evictions and introduce four-month notice periods for landlords.
The party say that their long-term plan to bring fiscal responsibility and stability back to the UK economy – through strong fiscal rules, respect for economic institutions and Office for Value for Money – will also play a vital role in getting inflation and interest rates down.
Moneyfacts data suggests the typical rate on a two-year fixed-rate loan had increased to above 6%, almost the rate double a year ago, and the Resolution Foundation estimates that 6.5m households will be affected by the post-mini budget rise in mortgage rates by 2026.
Cllr David Meller, Labour’s leader on Stockport Council , said:
“Here in Stockport families are being hammered by the Tory mortgage penalty.
“The Conservatives crashed the economy – and now we are paying the price. But Labour has a plan.
“Locally we are introducing additional support for families that depend on Council Tax Support, housing benefit or both by extending the entitlement for free school meals, worth around £500 for every eligible young person.
“Nationally the next Labour Government will restore the economic and financial security that families deserve. Our five-point plan to ease the Tory mortgage penalty offers practical help now, while our commitment to fiscal responsibility and growth will secure our economy for the future.
“After 13 years of low growth, stagnant wages and Conservative economic failure it’s time for change. It’s time for a General Election. It’s time for Labour.”