Robert Largan column: Help for mortgage payers

Read High Peak MP Robert Largan's latest column.

Last week, the Bank of England raised interest rates, as part of efforts to tackle inflation and the rising cost of living. Understandably, this interest rate rise has caused significant concern for everyone with a mortgage. 

But to tackle inflation, we need to understand what is driving it.

Obviously, the global pandemic caused a supply chain shock, with disruption driving up prices. That has only been made worse by Putin’s invasion of Ukraine, which caused the price of wheat to spike (given Ukraine is one of the largest wheat producers in the world) and led to record gas prices. All this has led to soaring costs for food production, storage and transport. This has fed through to higher food prices.

These global factors have certainly hit us here in the UK but we are not alone or the worst affected. UK food prices are about 7% below the EU average and core inflation is higher in 14 EU countries.

Higher inflation leads to higher interest rates. That’s why the Government are rightly focused on cutting inflation. It’s the best way to help families with the cost of living.

The Government have put huge sums of money into helping families and businesses, including the 5p cut to fuel duty and the Energy Price Guarantee, funded by a windfall tax on energy profits. From July, the average energy bill is expected to drop by £500 a year. 

We also have very low unemployment, lower than Canada, France, Italy and the Eurozone area. And we’re helping young families back into work by expanding free childcare.

The Chancellor has also agreed a new Mortgage Charter with the UK’s largest lenders, the Financial Conduct Authority, UK Finance and the Building Societies Association, to help ease mortgage pressures on households hit by rising interest rates.

Under the agreement, anyone worried about their mortgage can contact their lender for help and guidance, without any impact on their credit score.  

Mortgage holders will now be able to switch to an interest-only deal or extend their mortgage temporarily. Homeowners will have up to six months “holiday” before going back to their original teams and banks will have also have to wait twelve months before ordering a repossession.

Those approaching the end of a fixed rate deal have the chance to lock in a deal up to six months ahead. They can also request a better like-for-like deal with their lender right up until their new term starts.

If any local people need help on this, please do get in touch with me. I am here to help.

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