Mortgages: Sunak treating homeowners as “collateral damage”

26 Jun 2023

EMBARGO: For Immediate Release

Responding to Rishi Sunak ruling out support for mortgage borrowers as the Bank of England increases interest rates yet again, Liberal Democrat Ed Davey said:

“Homeowners are being treated as collateral damage by Rishi Sunak. This latest rate rise will scar family finances for years to come, all because this Conservative government crashed the economy and sent mortgages spiralling.

“It is heartbreaking that this could lead to people losing their family home through no fault of their own. Rishi Sunak needs to provide targeted support to those hardest hit, instead of cruelly standing by as people worry about keeping a roof over their head.”

ENDS

Notes to Editor

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, 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 Conservatives have cut taxes for the big banks by more than £3 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.