Labour will force a Commons vote on the party’s proposals to ease the mortgage crisis, urging Tory MPs to “take responsibility” and back the plan.
Sir Keir Starmer’s party will use Tuesday’s opposition day debate to pile pressure on Rishi Sunak, after last week’s Bank of England interest rate hike threatened to heap further misery on struggling households.
Labour’s plan would see banks forced to help mortgage holders struggling with payments, with the party urging the Government to compel lenders to allow borrowers to temporarily switch to interest-only payments or lengthen their mortgage period.
Banks would also have to wait at least six months before starting repossession proceedings as part of a five-point plan Labour believes would bring relief to mortgageholders.
Under Labour’s plans for an initial 12 months, the Financial Conduct Authority (FCA) would also be told to issue guidance to prevent the changes affecting credit scores.
Chancellor Jeremy Hunt last Friday agreed with lenders that mortgage holders struggling with repayments would be given a 12-month grace period before repossessions begin, with borrowers also able to extend the term of their mortgages or move to an interest-only plan temporarily “no questions asked”.
But Labour has criticised the measures as inadequate.
Shadow chancellor Rachel Reeves said: “Across Britain, people are being hit hard by a Tory mortgage bombshell.
“The Prime Minister may want to just keep putting his fingers in his ears, but the reality is millions of families are feeling the pain from this Tory economic failure.
“Not only has their economic recklessness driven this crisis, but this Tory government’s failure to make its measures mandatory leaves around 2 million households missing out on the mortgage support they need.”
The party pointed to figures showing that average mortgage costs will rise by £2,900 per year, with new mortgages now costing a typical household over £2,000 more per year than in France.
“I’m urging all Tory MPs to take some responsibility and vote today for Labour’s mandatory plan to ease the Tory mortgage penalty now and give households the reassurance they need,” Ms Reeves said.
