Mortgage and Rental Costs

Gerald Jones Excerpts

Tuesday 27th June 2023 Commons Chamber

[Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)]

The Tory mortgage bombshell can trace its roots back to the disastrous mini-Budget and the so-called growth plan last September. Coupled with 13 long years of Tory failures, it left our country in a mess and thousands of families in an extremely vulnerable and precarious position. Last September, a mortgage adviser in Merthyr Tydfil contacted me and told me the effect of the mini-Budget and how devastated he and many of his customers were to see hundreds of pounds added to mortgage payments every month. The shadow Chancellor was right that we can never allow the Tories to forget that.

After 13 disastrous years and an even more disastrous few months, the UK has the highest inflation in the G7 and a mortgage crisis that is worse than in other countries—typically, mortgages are £100 higher than in other European countries. In Merthyr Tydfil and Rhymney, approximately 6,400 households are affected by the Tory mortgage bombshell, paying on average an additional £1,300 per annum, on top of the cost of living crisis, all caused by the economic failures of the Conservative party.

Recently, I raised in the Chamber the plight of our local food banks, which are struggling to cope under so much pressure from demand and reduced donations, as people across our communities are feeling the pinch and are less able to donate. The Tory mortgage bombshell will only make matters much worse. Indeed, the added stress placed on families with their homes under threat is just unforgiveable.

Citizens Advice is an agency that works hard to support the most vulnerable. I work closely with our local citizens advice bureaux on promoting events to maximise income. They have been telling me for some time how their workload has increased massively, particularly on debt advice. We learned from Citizens Advice this week that its clients with mortgages have seen their finances fall off a cliff, as the shadow Chancellor said. Every month, the amount they need to spend on things such as housing, bills and food is over £100 more than their income. The situation is not sustainable and causes anxiety, stress and deep worry for so many of my constituents and many thousands more across the country.

The previous Prime Minister has apologised for her mistakes, which led to a spike in interest rates following the disastrous mini-Budget last Autumn. However, the Minister should do the same. This whole rotten Government should hang their head in collective shame for the misery they are causing so many.

The Tory mortgage charter falls short in a number of key areas. Not all the mortgage market is covered by the charter. There remains a huge worry that more than l million households could miss out on support. The Government must outline the measures they intend to take to ensure that help will be available to everyone struggling to pay their mortgage. Perhaps the Minister can address that in his wind-up, and confirm that support will be available to all, not just to those who happen to have a mortgage with one of the banks on the Chancellor’s invite list for his cosy chats.

All too often, this Tory Government have been too slow to act. Renters are not even mentioned in the latest charter. In his statement on Friday, why did the Chancellor make no mention of the impact of this crisis on people who are renting? It is time for the Minister to outline whether he agrees that one way to provide support for renters is to back Labour’s proposal to halt no-fault evictions.

The Conservative party likes to think of itself as the party of home ownership, but with housing affordability lower than ever in recent years, that claim lies in tatters. There is very little or no assurance given to those looking to take their first step on to the housing ladder that they will not be held back by issues in the mortgage market caused by the Tory mortgage bombshell. The Government simply cannot brush things away and put the cost of living crisis down to global factors. The latest data on mortgage rates specifically shows that they have increased faster here in the UK than in the USA since the mini-Budget and, as we have heard, the gap in mortgage interest rates with our nearest neighbours means someone with a £200,000 mortgage will pay over £1,000 a year more in the UK. The reality is that the Government have no explanation for that, apart from that they have been grossly incompetent.

It is time for the Government to step aside, put an end to the misery faced by millions of families, call a general election, let Labour get on with governing and get this great country back on its feet.