George Freeman, former minister for Mid-Norfolk, has resigned from his position, citing an inability to cope with skyrocketing mortgage payments.
On his Substack, Freeman disclosed a staggering increase in his mortgage, jumping from £800 per month to a daunting £2000, a sum he found unmanageable on his ministerial salary of over £118,000 annually.
This revelation opens a significant conversation: If a former minister with a six-figure income struggles with mortgage payments, what does this mean for the average homeowner?
As numerous individuals confront similar challenges to the one faced by the former minister, is it time for the Government to intensify efforts in assisting those struggling with escalating mortgage expenses?
Newspage asked brokers for their views, below.
Graham Cox, founder at Self Employed Mortgage Hub:
“George Freeman has received a dose of the real-world implications of his own government’s utterly moronic economic and housing policies.
“Perhaps because it doesn’t want to draw attention to it, this Government doesn’t seem to recognize the devastating effect of significantly higher mortgage and rent payments on people’s livelihoods and quality of life.
“Not to mention how it’s impacting the economy. These are the unintended consequences of never-ending house price increases.
“Sooner or later the whole house of cards comes tumbling down. Economic policy needs to be set to control property values if we ever want to escape the UK’s economic malaise and improve people’s living standards.”
Sabrina Hall, mortgage adviser & protection adviser at Kind Financial Services:
“Well, it’s at least refreshing that MP’s are feeling the impact of their own actions.
“However, how this situation differs considerably to that of most “normal” people in that most people when worrying about their mortgage payments don’t leave their jobs unless they have the promise of another higher paid job.
“The fact that he has options is a massive privilege. If his payment is £2,000 then I speak with clients who have a mortgage payment around this level who are on half (if not less) than that salary, so I suspect that the real issue is that he’s overstretched in other areas such as car finance.
“In addition, and I’m making quite a few assumptions here but given that his mortgage payment is relatively low compared to his income (despite what he might say) I would assume that he has plenty of equity in his property and therefore has the option to sell and potentially downside which isn’t an option a lot of people have.”
Riz Malik, founder & director at R3 Mortgages:
“If Conservative ministers are struggling, it baffles me how the Government expects households across the country to cope with significant increases in their mortgage payments when they come to renew.
“If anything, this is a wake-up call that just because rates might have come down, there are still many households who are struggling and having to make sacrifices daily.”
Gary Bush, financial adviser at MortgageShop.com:
“Doesn’t it make your heart bleed to hear that poor politician George Freeman, former minister for Mid-Norfolk, has to resign and go and get a job so that he can afford his escalating mortgage bill which is up to £2,000 a month.
“Welcome to the general public’s world, George.
“He feels that his taxpayer-paid £118,000 annual income doesn’t properly allow him to cover the increase that his mortgage has had since Trussonomics brought the entire country’s mortgage holders to their knees.
“If this wasn’t such a serious situation the whole country has been going through it would make a great comedy sketch.”
Stephen Perkins, managing director at Yellow Brick Mortgages:
“When reading his statement more clearly, the mortgage payment jump the straw that broke the camel’s back.
“The main strain on his income was a recent divorce and the maintenance payments that heavily reduced his disposable income to cope with increased mortgage payments.
“Rather than downsizing his home, he opted to reduce his main wage, but free himself up to earn more through second jobs and speaking arrangements.
“As one of his constituents I would prefer him to do his main job properly first. The key message here is no matter your income, people tend to live to their means and those with larger incomes have larger houses and expenses, so can be equally strained by increases.
“Those on six-figure salaries are unlikely to get public sympathy, and have far more options to be able to adapt than many on lower incomes feeling the strain a lot harder.”
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“I don’t have much sympathy for the ex-minister in question, given he is part of the party which caused some of the fastest spikes in mortgage interest rates we’ve seen in decades.
“Moreover, looking at the figures, it’s almost certain that the mortgage was interest-only, as repayment mortgages tend not to see anywhere near this kind of spike.
“On that basis, perhaps he should’ve been better prepared with capital set aside as a repayment vehicle he could call on in the event rates rose.
“Finally, how does it help him pay his increased mortgage by resigning from his position and taking a pay cut?
“Maybe he could simply live within his means, or better still, take the Government’s own advice and get a better job; I hear his next role could be in cyber.”
Simon Bridgland, broker and director at Release Freedom:
“If this comes as news to the powers that be and if it triggers action great.
“However, it is disgusting that it takes a minister to hit the headlines to perhaps make some notice the struggles that every other non-minister is having to deal with, for every single monthly payment.
“If he is struggling on a £2,000 monthly payment on £120,000 a year, I wonder what other regular payments he is having to make.”
Wes Wilkes, CEO at Net-Worth NTWRK:
“This may be unpopular, but isn’t it time, like in this example, we take some responsibility?
“Assuming that the minister was earning a ministerial salary at the time of taking the mortgage then the stress tests and examples of increased costs would have been in the mortgage offer.
“When we agree to a mortgage offer, we agree that we can make payments at these potentially higher rates (like we have now) and it is surely our responsibility to ensure affordability throughout the term.
“With 1.5 million people due to remortgage this year I guess we will see.”
Bob Singh, founder at Chess Mortgages:
“I think there is more to this story than meets the eye.
“Unless he has another high paying job lined up leaving his plum job isn’t going to save him.
“He would be taking home approx. £6000 tax and even after the higher mortgage payment he’s well able to pay the mortgage.
“No doubt he also received significant allowances, too.
“If he can’t live on £4000 then either he’s living extravagantly or is heavily in debt.
“If he is struggling to live off that then it makes you wonder how those earning one third of that are surviving.”
Ben Perks, managing director at Orchard Financial Advisers commented:
“I take no delight in seeing someone struggle with a huge spike in mortgage payments.
“Unfortunately, this is not uncommon and an increase from £800 to £2000 is a reality faced by many.
“I have spoken with several clients that have had to make drastic changes to their lifestyles when mortgages have come up for renewal, particularly last year.
“Surely though, if this has happened to a Conservative Minister (one of their own, on a good salary) a Conservative Government has to take action and do whatever it can to boost the economy, control inflation and drive down interest rates to a manageable level for the benefit of Ministers and General Public alike. Mr Freeman’s situation is not unique.”
