Millions of potential voters in marginal constituencies face punishing rises in their mortgage repayments over the coming months and years. The government is in disarray on the issue and is largely to blame for the mess. Labour has spied an opportunity to hammer the Conservatives: it is talking about a ‘Tory mortgage penalty’ and shadow chancellor Rachel Reeves is jumping on the bandwagon clamouring for mortgage payers to get help. But, if Labour goes too far in its demands, it could pay a heavy price.
With inflation stubbornly high, and the Bank of England rapidly losing credibility, mortgage rates are soaring. A two-year fixed rate that cost less than 2 per cent a couple of years ago could soon hit 7 per cent or more, tripling the monthly repayments at a time when household finances are already under strain.
A mortgage bail-out would be ruinously expensive
The Liberal Democrats have already called for a bail-out fund.
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