Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the potential impact of the Autumn Statement 2022 on the sustainability of existing mortgages; and if he will make a statement.

As the Chancellor has said, sound money and a stable economy are the best ways to deliver lower mortgage rates, more jobs and long-term growth. Economic stability relies on fiscal sustainability – and the Autumn Statement puts the public finances onto a sustainable footing, with debt as a proportion of the economy falling by the end of the forecast period.

Indeed, the Office for Budget Responsibility (OBR) has said that without the measures announced at Autumn Statement, underlying debt would be rising by £108bn in 2027-28. The OBR has also noted that the net effect of the Government’s package supports the economy in the aggregate, by “reducing the fall in output when the economy is in recession and unemployment rising”.

To support mortgage borrowers with rising interest rates, it was announced at Autumn Statement that, from spring 2023, the Government will allow those on Universal Credit to apply for a Support for mortgage Interest (SMI) loan to help with interest repayments after three months, instead of nine. We will also abolish the zero earnings rule to allow claimants to continue receiving support while in work and on Universal Credit.

In addition to SMI, the Government also provides protection in the courts through the Pre-Action Protocol, which makes it clear that repossession must always be the last resort for lenders. It is also worth noting that, if mortgage holders are struggling to keep up with their payments, FCA guidance requires firms to offer tailored support. This could include a range of measures depending on individual circumstances.