Soaring mortgage rates for Londoners have been discussed in the London Assembly today, with calls for the UK Government to intervene to protect families across London from falling into arrears or facing repossession.
A recent IFS report has warned that some 1.4 million mortgage holders — including about 300,000 in London — will see their mortgage payments rise by at least 20 per cent of their disposable income as they move from low to far higher rate deals, with around 690,000 of the 1.4 million are aged under 40.
The report also highlighted that London would see the largest average rise in monthly mortgage bills with an increase of £520, it added, compared to £390 for the wider South-East. Disposable income in London is set to fall by 12% as a result of the rises.
The rise in mortgage repayment rates is also expected to increase rent prices as buy-to-let landlords pass on increased costs to tenants.
During a debate in the London Assembly, Liberal Democrats Members reiterated their party’s calls for the UK Government to introduce a mortgage protection fund to protect families falling into arrears or facing repossession as a result of soaring interest rates, paid for by reversing Conservative tax cuts for the banks.
The fund would be targeted towards homeowners on the lowest incomes and those seeing the sharpest rises in mortgage rates. Those whose mortgage payments rise by more than 10% of their household income would be eligible for grants to help cover the cost of that rise, paid monthly. These payments would be capped at £300 a month.
The party argues such a fund could be paid for by cancelling tax breaks the Conservatives have given to big banks.
Commenting after the debate, Liberal Democrat London Assembly Member Hina Bokhari said:
“Hardworking families across London who have saved and saved to get on the property ladder are now facing having their homes repossessed or falling into arrears.
“The blame for this lies squarely in one place, with the UK Conservative Government who under Liz Truss played Russian roulette with our economy and now ordinary people are paying the price.
“Not only has this had a very human impact on people across our City, but the rise in mortgage rates is expected to cost the UK economy £15 billion a year.
“What help have the Conservatives offered? Some advice for people to “hold their nerve”. Could they get more out of touch?
“While the Conservatives continue to bury their heads in the sand, the Liberal Democrats will continue to push the UK Government to introduce an emergency Mortgage Protection Fund.”
