Conservative MPs fear the mortgage rate time bomb will cost them the next election because their government is blind to the impact of the “interest rate catastrophe”.
The cost of mortgages have surged following successive interest rate rises and the Bank of England is predicted to hike them even higher this week – from 4.5% to 4.75% – taking average two-year fixed mortgages to 6.25%. It will leave households facing an average £2,900 rise in annual payments according to the Resolution Foundation think tank.
They report that an estimated 1.6 million fixed rate mortgages are due to come to an end next year, raising fears of Conservative MPs about their government’s economic record in the eyes of the electorate.
Tory MP for the marginal seat of Telford Lucy Allan said: “I don’t think we have quite understood the interest rate catastrophe.”
Allan – who is one of a multitude of MPs stepping down at the next election – added: “People [are] telling me their monthly mortgage payment is exceeding their salary. That is unsustainable.
“Constituents do ask about ‘support for unaffordable mortgages’. I say ‘talk to your lender,’ but the reality is they need to sell sooner rather than later and that’s a hard message to hear.”
Rising mortgage rate is ‘killing are own people’, says Tory
Another Conservative said rising interest rates making mortgages more expensive is “really killing our own people”, adding: “It feels like this is the end of a cycle – 13 years coming to an end.”
Taming inflation remains the government’s “number one priority”, prime minister Rishi Sunak said on Wednesday, with a senior government figure, quoted by the Financial Times, adding: “Inflation is the disease in the economy.”
Elsewhere, Michael Gove blamed the short lived Liz Truss government for some of the country’s economic woes, saying it “exacerbated” the cost of living crisis
Speaking on Sky News’ Sophy Ridge on Sunday programme, Gove – the minister responsible for housing, admitted he does not have a mortgage. He said he is not “frightened” by the fact that mortgage providers pulled more than 800 deals from the market at the end of last month, but admitted he is “concerned”.
The secretary of state for levelling up said that making “sure that the cost of living comes back under control” is the “best tax cut that we can give to anyone”.
When Ridge reminded that the Conservatives have been in power for the last 13 years, Gove pointed to the consequences of the pandemic and war in Ukraine, adding: “I’m not saying that absolves this government or any government of the responsibility for dealing with it.
“One thing that is clear though is that the decisions that were taken by Liz Truss and Kwasi Kwarteng exacerbated the situation.”
However, Gove said that Sunak and chancellor Jeremy Hunt have stabilised the situation since, “against a very strong headwind”.
Ex-Tory MP quits over sex and drugs scandal
Meanwhile, another scandal hit Conservative MP has announced his resignation triggering another byelection.
David Warburton claims he has been denied a fair hearing by parliament into allegations he made unwanted advances to two women but admitted taking cocaine after drinking “incredibly potent” Japanese whisky with a third woman, in an interview with the Daily Mail.
The woman filmed Warburton who claims he was set, adding: “I have been naive and incredibly stupid.”
Warburton, MP for Somerton and Frome, had the party whip withdrawn in April last year. His resignation means Rishi Sunak now faces at least three byelections following the resignations of MPs Boris Johnson and Nigel Adams after the privileges committee found Johnson intentionally misled the House.
Nadine Dorries also announced she was stepping down– hours after saying she wouldn’t – but has so far not handed in her resignation. Dorries said she wants an investigation into why she was denied a seat in the House of Lords before stepping down, thereby delaying a byelection in her constituency.
Deputy leader of the Liberal Democrats Daisy Cooper said: “Time after time the Conservatives have mired themselves in sleaze and scandal neglecting the issues that really matter to people. Then they decided it was OK to leave local people in this seat without any proper representation at all.”
