Oldham MP: ‘Eyewatering’ mortgage increases set to follow 'chaotic' mini-budget

Families across the north west of England face mortgage hikes of between £282 and £374 as a result of the Tories’ crashing the economy, insists Oldham East and Saddleworth MP, Debbie Abrahams.

Ms Abrahams said: “Bank of England data shows that homeowners coming off two-year fixed terms are set to face huge mortgage increases due to the Tories’ attempts to hand unfunded tax cuts to the wealthiest.”

Labour leader Keir Starmer called it a “crisis made in Downing Street but paid for by working people” as he renewed his calls for Liz Truss to reverse the mini-budget that has “crashed the economy” and seen interest rates and borrowing costs skyrocket.

Ms Abrahams added: "Despite the government’s humiliating 45p climbdown, mortgage rates are still likely to top five or even six per cent, which is likely to prove unaffordable for many.

“An average buyer taking out a two-year fixed mortgage in the third quarter of 2020 faced an interest rate of about 1.6 per cent and monthly repayments of £794 . 

“Should interest rates reach six per cent, those repayments would increase to £1,168 an increase of £374.

“The average increase across the United Kingdom is almost £400 a month. 

"This is a conservative estimate considering that immediately after the government’s climbdown, rates were anticipated to reach 5.5 per cent.

“The increase in repayments will offset action on energy bills for many households. 

“The government’s refusal to back Labour’s plans for a windfall tax on oil and gas providers meant that taxpayers were already on the hook for higher additional borrowing than they would have been under a Labour government. 

“But Truss’ kamikaze budget has added to the region’s cost of living pain.

“These eye-watering mortgage increases will cause homeowners across Oldham, Saddleworth, and the whole North West of England sleepless nights, and the Tory Government is entirely to blame.

“Liz Truss and Kwasi Kwarteng crashed the economy with their attempts to hand enormous, unfunded tax cuts to those who least need it.

"The U-turn they were forced into came too late, the damage had been done. 

“The Prime Minister must reverse her budget, including her totally unfunded £17 billion corporation tax giveaway to the biggest companies.

“There is an alternative.

"Last week at our party conference Labour announced a comprehensive plan to target a homeownership rate of 70% and 1.5 million new homeowners.

“We set out proposals to build more houses, raise stamp duty on foreign buyers to stop them buying whole developments off-plan, and give first-time buyers first dibs on newly built homes.

“Our message is unequivocal: Labour is the party of home ownership.”

Leader of Oldham Council, Labour’s Cllr Amanda Chadderton is also concerned.

She said: “Many homeowners across Oldham were already struggling with living costs rising far quicker than wages.

"Now those coming off fixed rates are having to find hundreds of pounds extra every month that they hadn’t budgeted for, and in many cases simply do not have.

“The Tory government’s reckless behaviour has caused such a deep crisis that it is affecting people who have never had to turn to the council for help before. 

“That is why we have declared it a Cost of Living Emergency, and why our £3m response includes an increase in helpline staff, to reflect the rise in households who need support and ensure that everyone gets the help they need."

Anyone who is facing difficulties should contact the council helpline on 0161 770 7007 or visit: www.oldham.gov.uk/wecanhelp

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