Mortgages: 1,250 families lose homes since Mini Budget as country faces "tidal wave" of repossessions

Embargoed until 22.30 Wednesday 21 June 

• Lib Dem Leader Ed Davey warns government must act now to prevent "tidal wave" of repossessions
   
• Figures reveal number of homes being repossessed has surged by 50% in the latest quarter

• Ministers urged to bring in emergency mortgage support similar to last financial crisis

Liberal Democrat Leader Ed Davey has warned that the government must act now to prevent a “tidal wave” of home repossessions, as mortgage rates continue to surge with another Bank of England interest rate rise expected today.

It comes as analysis by the party reveals 1,250 homeowners have had to hand back the keys to their homes after falling behind on their mortgage repayments since the Mini Budget last September. This is equivalent to almost 50 families a week losing their homes amid soaring mortgage rates. Another 4,035 households are at risk of losing their homes due to mortgage repossession claims currently in the courts, up 40% compared to the same period last year.

The Liberal Democrats are warning the number of families losing their homes risks rising further as interest rates continue to soar, because of the economic damage done by the Conservative government and their failure to get inflation under control.  Just over two million borrowers are expected to be hit with higher mortgage repayments by the end of 2023 because their current deals are set to come to an end. 

Ed Davey is calling for an emergency Mortgage Protection Fund to support struggling families at risk of losing their home this year, paid for through reversing Conservative tax cuts to the banks, as well as new protections for renters. The Government took similar steps in the aftermath of the 2008 financial crash, introducing emergency mortgage help for vulnerable households at risk of losing their homes.

The temporary Mortgage Protection Fund would run for one year, providing targeted support to homeowners on the lowest incomes and those seeing the sharpest rises in mortgage rates. Those whose mortgage payments are rising by more than 10% of their income would be eligible for grants of up to £300 a month. This would be paid for by reversing the government’s over £3 billion of tax cuts for the big banks since 2016.

Liberal Democrat Leader Ed Davey said:

“The government must act now to prevent a tidal wave of repossessions as mortgage rates continue to surge.

“It is heartbreaking that thousands of families face losing their homes, all because this Conservative government crashed the economy and sent mortgages and rents spiralling.

“Rishi Sunak isn’t lifting a finger to help people suffering from this mortgage misery. It shows he is totally out of touch with families struggling to pay the bills.

“The government must bring in emergency support to help homeowners and renters on the brink, like there was after the last financial crisis. Sunak cannot wash his hands of this mortgage misery, he needs to act now before more families face losing their homes through no fault of their own.”

ENDS

Notes to Editor

1. Figures on repossessions are available from UK Finance here.  These show that 750 homes were repossessed between January and March of this year, up 50% on 500 the previous quarter. 

2. According to the latest Government statistics from the Ministry of Justice, there were 4,035 mortgage possession claims in the first quarter of 2023, up 40% compared to the same quarter in 2022..

3. According to the Bank of England (p53), just over two million fixed-term mortgages are expected to come up for renewal between Q4 2022 and the end of 2023.

Mortgage Protection Fund 

• The Liberal Democrats are calling for an emergency ‘Mortgage Protection Fund’ to protect families falling into arrears or facing repossession as a result of soaring interest rates.

• 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 Conservatives have cut taxes for the big banks by more than £3.5 billion a year since 2016, through cuts to both the Bank Levy and Bank Surcharge. The Liberal Democrats would reverse those cuts to ask the big banks to pay their fair share.

• This would be a temporary scheme to tackle the current problem of soaring mortgage rates. It would initially be introduced for a year, and the Government would need to review the need for it next year depending on what happens to mortgage rates.

• Similar emergency support to help homeowners at risk of losing their homes was introduced by the government in 2009 in the wake of the financial crisis, including the Mortgage Rescue Scheme, Homeowners Mortgage Support scheme and changes to the existing Support for Mortgage Interest scheme.

• The Liberal Democrats are also calling for protections for renters including an immediate ban of no fault evictions, a national register of landlords and the temporary reintroduction of pandemic-era measures protecting renters from evictions over rent-arrears and extending the mandatory notice period given by landlords.