Extra 100,000 families face ‘mortgage nightmare’ with hike before election

Extra 100,000 families face ‘mortgage nightmare’ with hike before election

An extra 100,000 families will be stung by a mortgage hike between now and polling day, new figures show.

More than 3,300 households a day will see their payments rise significantly before 4 July, and the average homeowner will have to fork out £240 a month more, or nearly £3,000 a year.

The Liberal Democrats, who obtained the figures, warned Rishi Sunak that he faces a “blue wall reckoning” with mortgage holders in what were previously solid Tory seats at this election.

Prime minister Rishi Sunak on the campaign trail (PA Wire)
Prime minister Rishi Sunak on the campaign trail (PA Wire)

The data shows constituencies such as North East Cambridgeshire – held by cabinet minister Steve Barclay – are among the worst affected, with hundreds due to see their fixed-rate mortgage end in June.

Liberal Democrat treasury spokesperson Sarah Olney said the Conservative government had crashed the economy “and now they are condemning hard-working households to a mortgage nightmare”.

She added: “Rishi Sunak’s claim that the government’s plan is working shows he is living in a parallel universe, as every day thousands of families are seeing their mortgage go up by eye-watering amounts.

“The prime minister is set for a blue wall reckoning in key battleground seats where fed-up voters are ready to say enough is enough with this out-of-touch Conservative government on July 4th.”

Mr Sunak faces a battle in this election to convince voters of his central message: that his economic plan is working, even as some struggle to feel it in their pockets. Despite falls in inflation, the Bank of England maintained interest rates at 5.25 per cent last month, and there are fears that rate cuts – expected this summer – could be delayed again.

Experts have warned that millions of households across the country are struggling with huge mortgage bills after the average two-year fixed rate jumped to more than 6 per cent, although it has since fallen.

Official figures also recently showed that mortgage possession claims hit a five-year high at the start of this year in the aftermath of former prime minister Liz Truss’s disastrous mini-budget. They soared by more than a quarter in just three months and are now at their highest level since 2019.

In April Ms Truss refused to apologise for the leap in mortgage rates which occurred in the wake of her short-lived premiership.

More than 3,000 households a day face higher mortgage payments (Dominic Lipinksi/PA)
More than 3,000 households a day face higher mortgage payments (Dominic Lipinksi/PA)

The Lib Dems are campaigning to “break the Tory blue wall” of traditionally safe seats across the south of England, with counties such as Surrey now in their sights.

Among the seats the party believes are up for grabs is Surrey Heath, formerly held by Michael Gove. The Lib Dems hope to overturn what was an 18,349 majority in 2019 under old constituency boundaries.

Other cabinet ministers whose seats the party is targeting include the education secretary Gillian Keegan in Chichester, the culture secretary Lucy Frazer in South East Cambridgeshire, and the justice secretary Alex Chalk in Cheltenham.

Few believe Mr Chalk can hold on as his majority from 2019 was just 981, while Ms Frazer is defending a majority of 11,490. However, Ms Keegan looks safer with a majority of 21,490.

The Lib Dems commissioned the analysis from the House of Commons Library, based on data from the Financial Conduct Authority.

In total, households coming off fixed-rate mortgages ahead of polling day will pay an additional £290m over the next year, the party said.

Bim Afolami, economic secretary to the Treasury, responded:“This is yet another press release from the Liberal Democrats where they are just sniping from the sidelines and contains absolutely no plan for the country.

“Rishi Sunak and the Conservatives have a clear plan and are taking bold action to strengthen the economy – with mortgages rates coming down, inflation down from 11.1 per cent to 2.3 per cent and £900 back in hard-working people’s pockets, which we were able to do as a result of the economy growing, securing a brighter future for all.

“A vote for the Liberal Democrats is an endorsement of Keir Starmer and Angela Rayner, which would see a tax rise of £2,094 for working families to fund Labour’s £38.5 billion blackhole. Labour’s high tax approach will take us back to square one on the economy which will harm families and punish hard work.”