Mortgage and Rental Costs

Kate Hollern Excerpts

Tuesday 27th June 2023 Commons Chamber

[Kate Hollern (Blackburn) (Lab)]

Many households who are already contending with the cost of living crisis are now set to face a further squeeze on their budgets thanks to the Conservatives’ mismanagement of the economy.

It is shameful to see so few Members on the Conservative Benches. The hon. Member for Stourbridge (Suzanne Webb), who is no longer in her place, said the Labour party was scaremongering. I wonder if that is what she will tell the 9,000 families in her constituency who are facing a £2,400 a year increase in their mortgages. Perhaps she just does not understand the impact of the financial disasters created by those on the Conservative Benches. Some 7,500 families in Blackburn are set to see their mortgages rise by £1,300 this year. The Resolution Foundation estimates that 6.5 million households will be affected by the post-mini-Budget rises in mortgage rates by 2026 and does not expect two-year fixed-rate mortgages to fall below 4.5% until 2027. That is a long time to hold your nerve.

The UK currently has the highest inflation in the G7. As with the energy crisis, the mortgage crisis is worse in the UK than in neighbouring advanced economies. And there is another crisis looming. Economists warn that there is a real risk of job losses and a sharp recession, as the latest economic forecasts project just 0.2% growth this year. We must not forget how we got here. The Conservative’s disastrous mini-Budget and 13 years of failure have left us dangerously exposed on inflation. During Prime Minister’s questions last Wednesday, the Prime Minister insisted that the best way to cut costs for homeowners would be to reduce inflation. On assuming office last year, his core commitment was to cut inflation to 5% by the end of this year. Of course, we all remember the Ready for Rishi campaign last July. He promised to reduce inflation. Conservatives did not believe him then and we do not believe him now. With inflation falling by only about 1.3% to 8.7% over the last six months, it looks increasingly unlikely that the Prime Minister will achieve that and fulfil his promise. The Government’s measures do not go far enough and leave too many people exposed.

In his statement to the House yesterday, the Chancellor stated that the charter has been signed by lenders covering 85% of the mortgage market—let us just forget the other 15%. Given that the charter does not cover the whole mortgage market, more than 1 million households could miss out on support. The Minister must guarantee that the measures he outlined will be available to everyone struggling to pay their mortgage, not just those who happen to have a mortgage with certain lenders and not just those who are up to date on their payments, because for months people have been falling behind, jumping from crisis to crisis under this Government. The Government are offering insufficient support to millions of renters. The Chancellor did not even mention them in his statement to the House yesterday. Has he made an assessment of the impact on local housing allowances? Has he made an assessment of the impact on the DWP? Or do the Government just accept that landlords will pass increased costs to tenants? An already broken rental market will suffer more without intervention.

Families are finding themselves on a cliff edge after months of increased bills and a cost of living crisis. It saddens me to see such a situation after more than a decade of austerity. Given what we have in our pockets and how we are able to pay our bills, it seems to us that, across the board, we are far worse off than we were back in 2010. No matter how many times the Prime Minister says, “Hold your nerve”, that will not pay the bills. How do you hold your nerve when you are struggling to feed your kids? How do you hold your nerve when you risk losing your home? I think the people of this country have held their nerve for long enough, and I think it is time for a general election.

[Several hon. Members rose—]