Commons Sense

House of Commons · Ministers' Questions

Mortgage Interest Rates: Impact on Disposable Income

Tuesday 6 February 2024 · 2 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 1 Partly answered 1 Not answered 0

Key points

  • Mortgage interest rates have fallen by more than 100 basis points since their peak in the summer.
  • The Government introduced a 100 billion support package worth over 3,700 per household.
  • Mortgage rates rose globally, but UK rates remain lower than in many jurisdictions like the US.

Topics (select to filter)

Questions & Answers

Q1 Rushanara Ali Lab Bethnal Green and Stepney
Economy
Context

The question arises from the concern over changes in mortgage interest rates during the current parliamentary term, potentially affecting household financial stability.

Question

What recent assessment has been made of the potential impact of changes in mortgage interest rates during this Parliament on household disposable income?

Answer from Bim Afolami

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.

Answered
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Q2 Rushanara Ali Lab Bethnal Green and Stepney
Economy Taxation Housing
Context

The supplementary question stems from concerns over the impact of the previous government's policies, including a rise in food prices and mortgages.

Question

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?

Answer from Bim Afolami

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.

Partly answered

Not addressed: Additional support for those facing mortgage distress

How: Needs To Talk To Her Shadow Chancellor About Their Plans

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