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Mortgage Support

Volume 740: debated on Tuesday 14 November 2023

21. What recent assessment he has made of the potential impact of changes in mortgage interest rates over the course of this Parliament on household incomes. (900055)

The path to lower mortgage rates, as everybody in this House knows, is through lower inflation, which is why the Prime Minister and the Chancellor made halving inflation one of our five priorities for this year. The latest Bank of England forecast shows that we are on track for that. In June, lenders representing more than 90% of the mortgage market agreed to our new mortgage charter, which includes new flexibilities to help customers manage their repayments, backed up by UK Finance’s advertising campaign encouraging anyone worried about their repayments to contact their lender.

Does the Minister agree that the best way we can help the next generation of homeowners is to increase the supply of homes, bring back the help to buy ISA and stop the 35-year mortgage shared-ownership models, which only increase house prices?

I thank my hon. Friend for his question. On his first point, we are increasing the number of homes and we are optimistic that we will reach our target of delivering 1 million new homes over this Parliament. Secondly, the help to buy ISA was closed to new accounts in 2019, but existing holders can continue to save into their accounts. On his third point about stopping 35-year mortgages, it is important to have choice in the market and for people to make those choices for themselves. As a Government we are committed to supporting people doing just that.

According to the Centre for Economics and Business Research, mortgage increases are expected to cost UK households £9 billion this year and next. How on earth do the Government defend that?

As the hon. Member knows, the reason why we are in this position is that there is a global phenomenon. We are doing what we can. We are working closely with the Bank of England and, over time, due to the policies of the Chancellor, the Prime Minister and this Government, interest rates will come down.

I welcome the hon. Member for Mid Worcestershire (Nigel Huddleston) to his post as Financial Secretary.

It has been a year since the Conservatives crashed the economy. In 2023 so far, 1.5 million fixed-term mortgages have expired, leaving working people facing sky-high increases in their mortgage costs. For people living in Wellingborough, for example, this Tory mortgage penalty means that households are paying another £190 a month on top of everything else in a cost of living crisis. The truth is that working people are paying the price for the Conservatives crashing the economy last autumn. Does the Economic Secretary think that is fair?

I thank the shadow Minister for his kind words, at least in relation to me.

It is important to recognise that in the eurozone, the United States and the UK there have been broadly similar increases in inflation and interest rates. We as a Government are confident that our policies will bring those down in due course.