No help for home-owners
The Prime Minister has said mortgage holders will not be given assistance with their payments, as average two year rates reached six per cent.
There had been calls for the government to help out home-owners in the same way that people were assisted during the pandemic.
But Rishi Sunak has said that the Government needs to ‘stick to the plan’ to halve inflation.
The Prime Minister said: “I know the anxiety people will have about the mortgage rates, that is why the first priority I set out at the beginning of the year was to halve inflation because that is the best and most important way that we can keep costs and interest rates down for people.
“We’ve got a clear plan to do that, it is delivering, we need to stick to the plan.
“But there is also support available for people. We have the mortgage guarantee scheme for first-time buyers and we have the support for mortgage interest scheme which is there to help people as well.”
Later this week the Bank of England will decide whether to put up interest rates yet again.
If it does – as it is widely expected to – then rises in mortgages repayments will follow.
The base rate is currently 4.75 per cent, but the fears are that it could reach six per cent.
Mike Bradley, a senior broker at Home Owners Advice, said: “The Bank of England’s task was to prevent inflation, which it has failed to do.
“The only lever it has is to raise interest rates, which is what it has been doing. And while inflation has started to slow it is still too high.
“It means home-owners are being squeezed by increasing mortgage repayments and the general cost of living.
“While asking the Government for help is something home-owners would like, it was never going to happen.
“The largesse dished out during the pandemic cannot go on for ever.
“We are all hoping that inflation falls and rates start to come down. We still have very high employment which is something that didn’t happen during previous economic downturns.
“We’ve seen asking prices for houses fall slightly, partly because the number of mortgages approved has fallen and mortgage products have been pulled or made more expensive.”