Oral Answers to Questions

Steve McCabe Excerpts

Tuesday 14th November 2023 Commons Chamber

[Nick Fletcher (Don Valley) (Con)]

16. What steps his Department is taking to support homeowners with their mortgages.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

21. What recent assessment he has made of the potential impact of changes in mortgage interest rates over the course of this Parliament on household incomes.

[The Economic Secretary to the Treasury (Bim Afolami)]

The path to lower mortgage rates, as everybody in this House knows, is through lower inflation, which is why the Prime Minister and the Chancellor made halving inflation one of our five priorities for this year. The latest Bank of England forecast shows that we are on track for that. In June, lenders representing more than 90% of the mortgage market agreed to our new mortgage charter, which includes new flexibilities to help customers manage their repayments, backed up by UK Finance’s advertising campaign encouraging anyone worried about their repayments to contact their lender.

[Bim Afolami]

I thank my hon. Friend for his question. On his first point, we are increasing the number of homes and we are optimistic that we will reach our target of delivering 1 million new homes over this Parliament. Secondly, the help to buy ISA was closed to new accounts in 2019, but existing holders can continue to save into their accounts. On his third point about stopping 35-year mortgages, it is important to have choice in the market and for people to make those choices for themselves. As a Government we are committed to supporting people doing just that.

[Steve McCabe]

According to the Centre for Economics and Business Research, mortgage increases are expected to cost UK households £9 billion this year and next. How on earth do the Government defend that?

[Bim Afolami]

As the hon. Member knows, the reason why we are in this position is that there is a global phenomenon. We are doing what we can. We are working closely with the Bank of England and, over time, due to the policies of the Chancellor, the Prime Minister and this Government, interest rates will come down.