Interest Rates: Income and Mortgages

(asked on 3rd November 2022) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment his Department has made of the impact of interest rate rises on trends in household income to mortgage cost ratios.


Answered by
Andrew Griffith Portrait
Andrew Griffith
Minister of State (Department for Science, Innovation and Technology)
This question was answered on 8th November 2022

Interest rates are rising across the world as countries manage rising prices largely driven by the COVID-19 pandemic and Putin’s illegal invasion of Ukraine.

As everyone’s financial situation is unique, the impact of these rate rises on individual households will vary. It is worth noting, however, that around 75% of residential mortgages are on a fixed rate and are therefore shielded from rate rises in the short term, and the Government is committed to ensuring a fair deal for renters.

Whilst the pricing of mortgages and the setting of rents are commercial decisions for lenders and private landlords respectively, the Government is carefully considering the impact of rising prices on households. That is why we have announced unprecedented support for households totalling £37 billion, which will support homeowners and tenants alike. In addition to the Energy Price Guarantee, millions of the most vulnerable households will receive £1,200 of support this year, with additional support for pensioners and those claiming disability benefits. We are continuing to keep the situation under review and focus support on the most vulnerable whilst ensuring we act in a fiscally responsible way.

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