A BBC Question Time audience member has laid bare the reality of rising mortgage rates by confronting ministers with the fact that her mortgage offer as a first time buyer has doubled since the mini budget was announced. Rabia told the panel, which included a Tory minister, that her first-time buyer interest offer had risen from 4.5% to 10.4%.
There were audible gasps from both the audience and panel members as Rabia went on to explain that the four offers she had initially been offered had all been withdrawn and that it was unlikely she would be able to afford the new rate. She told the crowd in Manchester: "I was given four different offers of interest rates and none of them are now available."
There has been increasing financial uncertainty since the UK Government's mini budget was announced last week. Mortgage lenders have been removing offers amid fears of rising interest rates and the pound has fallen drastically. Prime Minister Liz Truss and Chancellor Kwasi Kwarteng are under pressure to quell concerns about the impact of their financial plan.
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Echoing the concerns of many people across the country, Rabia explained the reality of the situation in a question to ministers. She said: "I just wanted to know what the plan was for mortgages because I was actually in the process of getting a mortgage as a young person and I was told that my initial interest rate would be 4.5%, and I was told today that the lender has pulled that offer and now the best offer I can get is around 10.5%.
"They are saying that you need to immediately put your application through because if you don't, the lenders may pull these offers. So for me now, as a first-time buyer, I don't think I can afford to get a mortgage.
"I was given this initial rate around two weeks ago, we were in the process of getting all the documentation together, making sure everything was correct, and today I was told the lenders are pulling those offers, those offers are no longer there."
"As a first time buyer you can't do it. From 4.5% to 10% is a drastic increase.
Tory Minister Paul Scully responded to Rabia by saying he anticipated this to be a short-term problem and said there were still more offers available now than there were a decade ago. He also compared the situation to the uncertainty for businesses at start of the Covid pandemic. At this remark, the audience scoffed with host Fiona Bruce intervening and pointing out "That was caused by a pandemic".
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