Mortgage Interest Rates Impact on Disposable Income 2024-02-06
2024-02-06
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Response quality
Questions & Answers
Q1
Direct Answer
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Context
The question arises from the concern over changes in mortgage interest rates during the current parliamentary term, potentially affecting household financial stability.
What recent assessment has been made of the potential impact of changes in mortgage interest rates during this Parliament on household disposable income?
Mortgage interest rates have fallen by more than 100 basis points from their peak in the summer. The Government have prioritised support for households vulnerable to cost of living pressures, introducing one of Europe's largest support packages. Real household disposable income per person was just 0.5% lower in Q3 2023 compared to Q4 2019, versus a forecast of nearly 3% lower.
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Assessment & feedback
Response accuracy
Q2
Partial Answer
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Context
The supplementary question stems from concerns over the impact of the previous government's policies, including a rise in food prices and mortgages.
Since the mini-Budget fiasco, food prices have soared, extreme damage has been done to the economy, and mortgages have skyrocketed. Every month 200,000 people are remortgaging, the average monthly rate has risen by £240, and 1.6 million will need to remortgage this year. After 14 years of Conservative Government, people are more than £10,000 less well off. Is it time for further support for those in mortgage distress?
The Government introduced a £100 billion support package worth over £3,700 per household. Mortgage rates rose globally; our levels are lower than in many jurisdictions like the US. We have worked on the mortgage charter to help hundreds of thousands manage mortgages and need to focus on bringing down inflation.
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Assessment & feedback
Additional support for those facing mortgage distress
Needs To Talk To Her Shadow Chancellor About Their Plans
Response accuracy