Stephen Morgan MP today (Tuesday 27 June 2023) is backing a vote in the House of Commons on the mortgage crisis urging the Government to get behind Labour’s package of mandatory measures to help ease the Tory mortgage bombshell hitting families.
It follows interest rates rising for the 13th time last week, increasing the painful squeeze on family finances.
Last Thursday, Labour set out their plan to ease the Tory mortgage crisis, with a set of mandatory measures.
These would be made compulsory by instructing the regulator to require all lenders to bring in measures such as allowing borrowers to switch to interest only mortgage payments for a temporary period or to lengthen the term of their mortgage period.
By failing to make its own measures mandatory, the government are allowing around 2 million households to miss out on the mortgage support they need.
It comes as figures reveal the average mortgage costs will be going up by a crippling £2,900 per year, and follows the release of new figures yesterday show new mortgages will now cost a typical household in Britain over £2,000 more per year than in France and over £1,000 more than in Ireland and Belgium.
Responding to the forthcoming vote, Portsmouth South’s Stephen Morgan MP, said:
“Portsmouth people struggling to pay their mortgages are asking why is the country in the mess it is. The answer is the disastrous mini-budget and 13 years of failure has left Britain dangerously exposed on inflation. The UK currently has the highest inflation in the G7.
“What’s more, the mortgage crisis is worse in the UK than in other countries with UK households are paying almost £100 more a month than in other European countries.
“Government has either been too been slow to act or have refused to guarantee support – with millions missing out as a result and Portsmouth people suffering.
“Labour’s plan, with a set of mandatory measures, will help ease the crisis and go a long way in helping people in Portsmouth struggling as a result of the Tory mortgage penalty. That’s why I am urging all MPs to back the vote in Parliament today”.
Speaking ahead of the Opposition Day Debate, Labour’s Shadow Chancellor Rachel Reeves said:
“Across Britain, people are being hit hard by a Tory mortgage bombshell.
“The Prime Minister may want to just keep putting his fingers in his ears, but the reality is millions of families are feeling the pain from this Tory economic failure.
“Not only has their economic recklessness driven this crisis, but this Tory government’s failure to make its measures mandatory leaves around 2 million households missing out on the mortgage support they need.
“I’m urging all Tory MPs to take some responsibility, and vote today (Tuesday) for Labour’s mandatory plan to ease the Tory mortgage penalty now and give households the reassurance they need”.
Policy background:
Labour is calling on the government to bring in temporary measures to guarantee struggling mortgage borrowers can access support from their lenders. The measures would include:
- 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.
- Require all lenders to make government repossession restrictions mandatory.
- 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 shouldn’t 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.
All the mortgage measures would be subject to standard suitability checks and should not come with penalty fees.
Labour is calling on the government to put these measures in place for an initial period of 12 months. After a year they should be reviewed to see if they are still required.
Currently some lenders are offering similar measures, but they are not required to do so meaning many borrowers might miss out.
This would be delivered by the government instructing the Financial Conduct Authority to require lenders to offer these options. Although the measures are different, this is the same route through which the government supported those with mortgages during the Covid-19 pandemic.
Alongside these emergency measures Labour has a long-term plan to restore economic stability and lower bills.
Labour would also boost home ownership, doing this by reversing reckless Tory planning changes to build more houses and more affordable houses, and giving first dibs on new houses in some areas for first time buyers, alongside a new comprehensive mortgage guarantee scheme to help first-time buyers onto the ladder.
