Mortgage and Rental Costs

Debate between Paulette Hamilton and Derek Twigg

Tuesday 27th June 2023 Commons Chamber

[Derek Twigg (Halton) (Lab)]

Every day I hear from constituents, as many of us do, who are facing hardship as the cost of living crisis spirals out of control. It is truly extraordinary that in Britain today, people across our communities are having to worry about whether they can afford to heat their homes or feed their families, which is a major worry that we will see again as the weather cools down and we come into autumn and winter this year.

We now face another crisis, courtesy of a Conservative Government who seem entirely clueless as to a solution: a mortgage bombshell that leaves homeowners wondering whether they can even keep a roof over their heads. Let us be clear about the scale of the mortgage bombshell. In Halton, there are currently 9,600 households with an average mortgage payment increase of £1,600 a year. I hear from constituents who have lost mortgage deals and simply do not know what to do. Young people trying to buy their first home have been cruelly disappointed; for many, the dream of their first home will not be realised any time soon. That is another way this Government are failing young people. Others tell me that their mortgage costs are rapidly becoming unaffordable.

Worse still are the heartrending stories I hear from constituents who are about to lose their homes altogether. In Halton, the waiting list for social housing is huge, with over 4,000 households on it. Halton Borough Council is doing everything it can to help those in desperate need of a home, but as in so many other parts of the country, its services are stretched to breaking point.

[Mrs Paulette Hamilton (Birmingham, Erdington) (Lab)]

Time and again I meet people in my surgery who can barely afford to feed their family, let alone afford rent hikes. Does my hon. Friend agree that people in communities across the country cannot afford to pay the price of a Tory Government?

[Derek Twigg]

My hon. Friend makes an important point, and she is absolutely right. Places such as my constituency, with some of the highest rates of poverty in the country—which I will come to shortly—are finding it particularly difficult.

There are homeless children from my constituency living in hotels out of the area, who are struggling even to continue to attend their local schools. Recent figures from the End Child Poverty coalition show that 30.9% of children in Halton are living in poverty, but at Widnes food bank donations are now falling below demand. That food bank is purchasing food using monetary reserves. Food inflation has adversely affected the ability of people who had previously donated food to do so—what a disgrace in this modern age. This is at a time when rising numbers of people in my community need to turn to food banks because they cannot afford the essentials that we all need to survive. The situation is becoming unsustainable.

I have been contacted by an increasing number of constituents whose landlords are being forced to sell up as they cannot afford their own mortgages. Nearly 200 households in my constituency are classed as priority homeless, and less than a handful of social housing properties become available each week. There is little point in telling those people to look into private renting, as local housing allowance falls even further behind the spiralling cost of rent. In Halton, local housing allowance for a three-bedroom home is £593 per month, but the current lowest private rents are £750 per month. Local housing allowance for a two-bedroom home is £498 per month, with the current lowest private rents at £650 per month. More and more of my constituents face the nightmare of homelessness, and more and more cannot afford the essentials needed to survive.

What is truly shocking is that this did not have to happen in this way. Last autumn’s mini-Budget, founded on unfunded tax cuts and pushed through without proper scrutiny, was an exercise in economic recklessness that has left hard-working people having to shoulder yet another burden. There is also the impact of inflation, of course, and the fact is that this Prime Minister, when he was Chancellor—I challenged him on this at the time—did not take inflation seriously enough. We know the impact that inflation is having on the cost of interest rates and, therefore, mortgages. The Government have created this catastrophe, and they need to take more urgent steps to address it.

Labour’s five-point plan could help to ease the crisis. I urge the Government to consider the measures that we are putting forward—requirements that would cover the whole mortgage market, unlike the Government’s charter with selected banks. Local housing allowance must be increased if we are to stem the tide of evictions that threatens to completely overwhelm housing services across the country.

This is Government incompetence, plain and simple. It is hurting hard-working people, and it is high time that the Tories stop thinking about how they can grab cheap headlines and instead focus on doing more to really help the many people who are about to lose their homes. The fact remains that this country is worse off under the Tories—people feel worse off themselves. We are seeing failings across public services of a sort I have never seen in my lifetime, and the fact is that this Government need to go now.