Homeowners Stunned by Record Mortgage Shock as Average Increase Soars to Nearly £3,000

The average mortgage debt in the UK currently exceeds £127,000, while the size of new mortgages taken out this year has reached an average of £184,000.

Fortunately, the crisis is anticipated to impact a smaller percentage of the population compared to previous financial crunches due to the declining number of UK residents with mortgages. In 1989, nearly 40% of families had mortgages, but today, that figure stands at below 30%, with more people either owning their homes outright or opting to rent.

Despite the challenges faced by struggling mortgage holders, the Chancellor has ruled out implementing measures such as tax breaks or a Covid-style subsidy scheme. Government officials argue that such actions would further exacerbate inflation and prove untenable given the current state of public finances.

Labour’s shadow chancellor, Rachel Reeves, emphasized the importance of economic stability and resilience, criticizing the Conservatives for their failure in these areas. Reeves stated, “Over the course of 13 years, the Tories have weakened our economy and subsequently led it to crash, leaving working people to bear the consequences for years to come.” She asserted that Labour would restore financial and economic security, ensuring that families are not constantly teetering on the edge and enabling the urgent growth of the economy to seize future opportunities.

A Treasury source revealed that Mr. Hunt has urged lenders to fulfill their responsibilities and support mortgage borrowers who are facing difficulties. Additionally, the source highlighted that the most effective policy for assisting mortgage holders is to halve inflation this year and aid the Bank of England in achieving its 2% inflation target.