Karin Smyth, MP for Bristol South, has welcomed Labour proposals to fix the Tory mortgage penalty as “another example of Labour standing up for working people”.
New projections show that an estimated 11,700 families in south Bristol could face a £3,000 hike in mortgage costs over the year.
It follows the news that many mortgage deals are being withdrawn by Banks and interest rates being increased, with Moneyfacts data suggesting the typical rate on a two-year fixed-rate loan had increased to almost 6%, almost double a year ago, and the Resolution Foundation estimating that 6.5m households will be affected by the post-mini budget rise in mortgage rates by 2026.
This week, economists warned that there is a real risk of job losses and a sharp recession. The latest forecasts of economic growth this year suggest that the UK is struggling to get out of the slow lane, with growth of just 0.2% forecast on the year.
On Thursday (22 June), Labour’s Shadow Chancellor of the Exchequer announced that in government the party would:
– Require lenders to allow borrowers to switch to interest only mortgage payments for a temporary period, or lengthen the term of their mortgage period.
– Require lenders to reverse any support measures when the borrower requests.
– Make it required for lenders to wait a minimum of six months before initiating repossessions.
– Instruct the FCA to urgently issue consumer guidance that those requesting support should not see their credit score affected.
Karin Smyth, MP for Bristol South, said:
“The Tory mortgage penalty is devastating for family finances and is holding back our economy. When I speak to constituents, they are open about their fear of the cost of living crisis. We cannot stand by whilst inflation destroys incomes.
“Unlike the Conservative Government, Labour will act. Our Shadow Chancellor has outlined a series of solutions to the chaos imposed on the country by Liz Truss’s mini budget. By making lenders be more flexible and understanding of the situation facing households we can take the interest rate rise shock out of the system. Plus, we would change consumer guidance so that credit scores are not hit when mortgage holders request support from their lender.
“This is just another example of Labour standing up for working people. We can grow a fairer economy and protect people from the extremes of inflation. After 13 long years the Tories have run out of ideas and the public has run out of patience. We need change so we can deliver the better future our country deserves.”