High inflation is affecting countries around the world, but that is small comfort when we see rising prices in the shops and receive higher bills for services that we rely upon. That’s why the government’s top priority is to bring inflation down, and to support the Bank of England in doing what it takes to achieve this. One of the consequences however of the strategy of the Governor of the Bank to get us back to the target level of inflation of 2%, is higher interest rates. This means that homeowners will face larger monthly repayments as their current mortgage deal ends.
On the whole the mortgage market in this country is stronger than it was before the financial crisis in 2008. Over the past year the average homeowner re-mortgaging had a loan that was about half the value of their property. Currently only around 10% of mortgage customers have loans greater than 75% of the value of their property, compared to around 25% in 2008. However, it’s important that lenders do all they can to support customers who are facing rising mortgage costs.
The Chancellor of the Exchequer, Jeremy Hunt, has agreed a Mortgage Charter with the UK’s biggest lenders and the Financial Conduct Authority, in order to help people who will be mortgaging their property in the coming months. Firstly, anyone worried about their mortgage repayments can contact their lender for help and guidance, without any impact on their credit file and we would encourage you to contact your bank who are there to help. For customers who are up to date with payments, they will be able to switch to a new mortgage agreement at the end of their existing fixed rate deal without another affordability check. Lenders will offer tailored support for anyone struggling and this could mean extending their term to reduce their payments, offering a switch to interest only payments, as well as a range of other options, like a temporary payment deferral or part interest-part repayment. The right option will depend on the customer’s circumstances. The Mortgage Charter will also permit customers who are up to date with their payments to switch to interest-only payments for six months or extend their mortgage term to reduce their monthly payments. If you would like any further advice about the Mortgage Charter it would be best to contact your lender, but please also feel free to contact my office at the House of Commons.
On 17 June I was delighted to be included on the list of those to receive an award on the first Birthday Honours list of King Charles III. I have been appointed as an Officer of the Order of the British Empire (OBE). I would like to thank everyone I have worked with, or who have provided me with guidance, encouragement or support over the years. An award like this is recognition of what we have achieved together. The honour itself is for political and public service, but it has been a pleasure by itself, to have been elected four times over the past thirteen years, to serve as your Member of Parliament.
I was also very pleased to see that Judith Richardson from Dungeness has been awarded the British Empire Medal for her services to Maritime Safety. Judith has been an active supporter for many years of the RNLI lifeboat at Dungeness and this recognition is well deserved.