Homeowners in London and the South East, often referred to as the ‘Blue Wall’ regions, have been disproportionately affected by increased mortgage payments, reveals new research commissioned by the Liberal Democrats.
These findings come a year after Liz Truss’s contentious mini-Budget, which has seen typical homeowners in these areas face a £3,000 increase in mortgage payments.
According to data from the House of Commons Library, homeowners who were on a 2-year mortgage deal and remortgaged after last September’s mini-Budget saw their rates skyrocket from 1.69% to an average of 5.17%.
In London, where the average outstanding mortgage is £150,000, the typical increase in mortgage payments has been around £3,066 over the last year. In the South East, with an average outstanding mortgage of £144,000, families have seen an average increase of £2,944. This contrasts sharply with the national average increase of £2,003, or £167 a month.
Those who opted for a 5-year deal post-mini Budget have not fared much better. Despite a marginally lower interest rate of 5.1%, they are projected to pay an additional £12,893 in London and £12,377 in the South East over the life of their mortgage.
The Liberal Democrats are pressing the Government to take corrective measures, proposing an emergency Mortgage Protection Fund financed by reversing the tax cuts previously granted to large banks.
The party also recommends protections for renters, such as an immediate ban on no-fault evictions and extending the default tenancy period to three years for greater stability.
Sarah Olney MP, the Liberal Democrat Treasury Spokesperson, criticised the Government’s approach, saying: “One year on since the disastrous mini-Budget, families are still facing a crippling Truss tax on their mortgages.
“Rishi Sunak has shown he is totally out of touch with families having to cut back because their mortgage payments have gone through the roof.
“He could choose to help struggling homeowners at risk of losing their home; instead, he is handing billions of pounds of tax cuts to the banks.
“People will never forgive this Conservative Government for taking a wrecking ball to the economy and then forcing families to pick up the tab.”
