No answer to mortgage crisis without building more homes, Labour says

No answer to mortgage crisis without building more homes, Labour says

Lisa Nandy raised concerns about the lack of mandatory measures in place to help mortgage holders, as she argued significant numbers of people will not be able to access any support because of their voluntary nature.

She stressed that while immediate support measures are important, though, the emphasis should be on tackling the housing crisis at its core.

In crunch talks with lenders on Friday, Chancellor Jeremy Hunt agreed that mortgage holders struggling with repayments will be given a 12-month grace period before repossessions begin.

Under the measures being rolled out in the coming weeks, borrowers will be able to extend the term of their mortgages or move to an interest-only plan temporarily “no questions asked” in a change that echoed Labour’s demands.

Asked about them on Sky News’s Sophy Ridge On Sunday show, hosted by Sir Trevor Phillips, Ms Nandy said: “Well, the key is whether these measures are mandatory or not, and we understand that they are not.

“We estimate that significant numbers of people won’t be able to access any support at all unless the measures become mandatory so that all mortgage payers, not just some, have access to these measures that give them more flexibility to extend mortgage terms, to be able to shift from one type of mortgage to another.

“We want clarity about whether there’ll be any fees or tariffs attached to changing the terms of your mortgage.

“We want to ensure that it won’t affect people’s credit rating if they take up these offers.

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“These are all questions that the Chancellor has to be able to answer if people are to be confident that there is help coming now and they’ll be able to stay in their homes.”

She added: “But more importantly for far too long, even before the Tories crashed the economy and sent mortgages through the roof, we have had an affordability crisis in this country. The reason that people are feeling a lot of more pain now than they were in the 90s is because the average buyer in the 90s was borrowing three or four times their annual salary. Now, they are borrowing around 11 times of their annual salary.

“There is no answer to this crisis without building more homes and that’s why exactly what Labour will do.”

Appearing on BBC’s Sunday With Laura Kuenssberg later on, Ms Nandy was questioned about Labour’s plan to order councils to offer green-belt land for development as a way to solve the housing crisis.

On whether they would give local people a veto, she said: “Actually, we will do better than giving local people a veto.

“We are going to write it into law as possible part of our first flagship piece of legislation, the take back control act, that councils must be involved from the outset in developing these plans.”

She went on: “We will retain the right of communities to object to planning decisions in their area, but we will do two things as well: the first is we will mandate combined authorities to consult at a much earlier stage so that they are actually showing evidence of how people have made those decisions themselves and not just had them handed to them by people in the town hall.

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“We think that’s one way in which you get the right sort of housing built in the right places with community consent, and then this ongoing war that happens after the event.

“And secondly, we will allow combined authorities to set up development corporations to take charge of the lands and reform CPO (compulsory purchase order) powers, compulsory purchase powers, so that that land is purchased at market rate and not at inflated rates as it currently is.”

  • June 25, 2023