Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps he is taking to ensure the affordability of mortgages; and what steps he is taking to ensure that current mortgage holders are protected from losing their properties if they cannot afford their full repayment rates.

Arrears and repossession levels remain low: according to the latest UK Finance data, 700 residential mortgaged properties were repossessed in Q3 2022. This was lower than the 1,070 in Q1 2020 (pre-pandemic). The Government of course remains watchful of any emerging trends in this space.

It is worth noting though that around 75% of residential mortgage borrowers are on fixed-rate deals and therefore shielded from interest rate rises in the near term. If mortgage borrowers do fall into financial difficulty, FCA guidance requires firms to provide support through tailored forbearance options. The Government has also taken a number of measures aimed at helping people to avoid repossession, including Support for Mortgage Interest loans for those in receipt of an income-related benefit, and protection in the courts through the Pre-Action Protocol, which makes clear that repossession must always be the last resort for lenders.

More broadly, the Government has taken decisive action to support households across the UK through the cost-of-living challenges ahead, whilst remaining fiscally responsible. In addition to the £37 billion of support for the cost of living already announced for 2022-23, the Government has announced further support for next year designed to target the most vulnerable households. This cost-of-living support is worth £26 billion in 2023-24, in addition to benefits uprating, which is worth £11 billion to working age households and people with disabilities. The Government is also continuing to provide support to all households through the Energy Price Guarantee, which will save the average UK household £500 in 2023-24.