Britain’s Labor Party has announced that it will plan out the financial hardship caused by growing mortgage costs, which will be the main agenda ahead of the next national election in 2024.
Labor plans to direct the lender to increase the mortgage period and, for a temporary period, switch to interest-only mortgage payments. Such a move should not affect the overall borrower’s credit score.
The Labor Party’s finance spokesperson, Rachel Reeves, stated: “Our five-point plan to ease the Tory mortgage penalty offers practical help now, while our commitment to fiscal responsibility and growth will secure our economy for the future.”
Although the Bank of England has increased interest rates 12 times in a row since December 2021, the impact of it has only started to be felt now by many mortgage holders as the low fixed rates agreed upon throughout the COVID-19 pandemic expire.
Since the predicted slowdown to hold at 8.7% in May failed to materialize, the central bank is set to raise the interest rate by a quarter point to a 15-year high of 4.5% to lower inflation.
To discuss how the government can help homeowners, Finance Minister Jermy Hunt is expected to meet with major banks on Friday; however, he further stated that they could not significantly provide financial assistance to the borrowers.
Britain’s financial watchdog has suggested that the temporary guidance offered by loan providers and other financial institutes during the COVID-19 pandemic should be made permanent to help customers who find it challenging to repay their mortgages; the 31st of July is the deadline for implementation.
Industry group UK Finance stated that lenders were already helping those struggling with mortgage payments by offering a temporary switch to interest deals or term extensions, further stating that arrears and repossessions of properties remained low.
- Published By Team Timeswire