Andrew Griffith, city minister, said banks “can and should” step in with more help to avoid an increase in home seizures as people delay payments.
Banks should help families facing soaring mortgage costs, Treasury Secretary Andrew Griffith said.
Mr. Griffith, the City Minister, said banks “can and should” step in and provide additional help to avoid an increase in home forfeiture due to late payments.
Chopper's Politics Podcast – Griffith, Morrissey, Knox
When asked if banks should intervene to help their clients with mortgage costs, Mr. Griffith said: “Well, they can and should – and that's in enlightened everyone's interests, because no one wants to see more seizures, no one wants more arrears. ”
Banks have previously committed to helping customers struggling with repayments through a range of measures, including extending mortgage repayment periods, mortgage holidays, or allowing homeowners to switch from a repayable mortgage that includes capital to a mortgage that simply pays interest.
Chancellor Jeremy Hunt will meet the heads of some of Britain's biggest mortgage lenders on Friday to discuss how they are helping those struggling financially due to rising interest rates.
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Interest rate companies at the meeting will be represented by NatWest, Nationwide, Barclays, HSBC, Santander, Lloyds and Virgin Money. Officials from the Financial Supervision Authority will also be present.
Treasury sources said the meeting is aimed at better understanding how many people are struggling and holding banks accountable for past promises to help those who are struggling. Mr. Hunt is expected to “keep the banks under fire” on past pledges, but also “will push for more,” according to a Whitehall source. The details of any new deal are unclear.
On Thursday, the Bank of England raised interest rates for the 13th consecutive time from 4.5% to 5% in an attempt to stop such a rapid rise in prices. Mr. Griffith has made it clear that banks only consider taking someone's home if they are behind on their payments as an “absolute last resort.”
Repossession is a “last resort”
He said, “Repossession is the absolute last resort. . Labor talk about what you don't know you won't have a re-ownership period for six months.
“The reality is that no lenders will seek this, and usually it won't happen in such terms. It's much, much longer if that's the case. Until then, there are many more options.”
Mr. Griffith also urged calm about the current crisis, noting that the proportion of people in debt is barely a third of what it was after the 2008 financial crisis.
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He said “the forfeiture is a disaster for everyone,” adding: “The current level of mortgage arrears is nearly as low as ever. It has been flat since pre-Covid. It hasn't changed much despite the interest rate change.
“It's a lot lower than it was when Labor was last in power, so it's now just under one percent – it was around 3.3 then. percent. in 2009. Obviously, we are watching this closely.”
The Liberal Democrats' plan
It came as Labor withdrew financial support for struggling mortgage holders.
Rachel Reeves, Shadow Chancellor of the Exchequer, said the party would not support the Liberal Democrats' call for a mortgage emergency protection fund to be paid for by reversing cuts taxes for large banks.
“First of all. , we must have an address scheme,” she said. “There are people who are particularly affected, who are really struggling, through no fault of their own, with these higher mortgage payments.
Mortgage Interest Calculator – original
“Also, we do have a huge problem with inflation in the UK and a lot of untargeted fiscal support from the government is the wrong answer when we need to fight inflation.
“A big fiscal injection of money into the economy, especially a misdirected injection, would be the wrong approach,” she said on the Today program on BBC Radio 4.
“There are different ways to do this, but actually helping people by properly taxing energy companies and using that money to help people with their bills is a practical thing that the government can still do,” she added.She insisted that such support could help bring down inflation, telling the BBC that “if you freeze accounts, for example, or reduce them, it will directly affect inflation.”
“Miras » not a solution
Mr. Griffith, 52, is a former director of the FTSE 100 who, like the late Lord Young of Graffham, who advised both Margaret Thatcher and David Cameron, is not paid for his work as Minister of State.
He said the mortgage interest tax break, introduced in the early 1980s as “Miras” by then Chancellor Geoffrey Howe and proposed by some Conservative MPs this week, was not the solution to the crisis.
” Miras is long gone. Miras was introduced at a time when the highest income tax rate was 60 percent. So, we live in a completely different world.
“We want a fair, simple, and low tax system. And you won't achieve that by adding a lot of select reliefs.
“What do you really want to do is to try to create a system that is as low as possible across the board.”< /p>Do you think banks should bail out mortgage customers after an interest rate hike? Let us know in the comments below
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