As the cost-of-living crisis continues to cripple families across Northern Ireland, uncertainty around the future of mortgage rates is an added pressure.
Money expert Martin Lewis has warned that a mortgages “ticking timebomb” awaits if UK interest rate rises follow market predictions. It comes amid recent suggestions that the Bank of England may need to raise interest rates to as high as 6%.
It's feared that thousands of homeowners are now facing hikes in their mortgage payments, with others potentially being excluded from home ownership.
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Speaking on Thursday, SDLP South Belfast MP Claire Hanna has pressed the Chancellor to ensure that people are protected and has urged the Treasury to meet with financial institutions to see what additional protections could be afforded to homeowners.
Speaking after a response to her parliamentary questions to the Treasury, Ms Hanna said: "We are the middle of a perfect storm affecting many families and we expect things to get even harder over the coming months as a direct result of this government’s economic policy and actions. Uncertainty around mortgage rates is now causing a lot of anxiety, with the possibility that people could see their mortgages jump significantly because of the disastrous Tory budget.
"People are not seeing their incomes increase and are facing a situation where they may no longer be able to afford their mortgage. People will no doubt also be forced into overdraft on bank accounts as they struggle to balance essential outgoings against income.
"The Treasury has said that the Financial Conduct Authority (FCA) has guidance that requires firms to offer tailored forbearance options to mortgage borrowers and overdraft users that are in financial difficulty. Financial institutions must ensure that they play their part fully and I hope that mortgage providers will work constructively with borrowers to offer solutions that work for people, such as a payment holiday, partial payment, or extension of mortgage term.
"People are already suffering as a result of the actions of this Government, and we need to ensure that further blows are not caused by additional financial penalties or people being put at risk of losing their homes."
UUP Finance spokesperson, Steve Aiken OBE MLA said: "Last week I pointed out that the Chancellor Kwasi Kwarteng’s mini-budget was a huge gamble. That his tax cutting and national debt adding proposals didn’t have the support of the Bank of England is both astonishing and reckless. Buying Government bonds is an act of desperation.
"In a few short days the very underpinnings of our economy have been threatened. More worryingly, thousands of homeowners are now facing huge hikes in their mortgages, coupled with those who will now be excluded from home ownership. They are now facing a personal financial crisis. A crisis that will only be compounded by spiralling energy costs and food inflation.
"The problems with interest rate rises and mortgage shortages cannot be blamed on Putin, or any other factor. This potential disaster sits fully in the lap of the Prime Minister and Chancellor. They have very little time to fix the problem and must act now. Doubling down on a gamble is madness. The Conservative Party needs to act now for the sake of everyone."
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