Analysis from the Labour Party has shown that the average household in Newcastle North is set to be put under greater pressure during the cost of living crisis due to the Conservative mismanagement of the economy.
The Bank of England warned in December that around 4 million households with a mortgage will be exposed to rate rises this year, with Bloomberg reporting that around 800,000 will see their mortgage rates double. In Newcastle North, 10,000 households could be hit by the Conservative mortgage penalty.
This week, the IMF chief economist singled out higher mortgage rates as a reason for Britain’s poor performance after the country’s growth was downgraded, leaving it as the only major economy expected to shrink in 2023.
Newcastle North MP Catherine McKinnell commented:
“With households already struggling due to the cost of living crisis, and record energy and food prices, up to 10,000 households in Newcastle North are set to be hit by an additional Conservative mortgage penalty due to their reckless gamble in the disastrous mini-budget on top of thirteen years of mismanagement of the economy.
“Whilst already facing a cost of living crisis, it is clear that people in our city and country are worse off thanks to the Conservatives. Labour have a plan to stabilise the economy, invest in our future and get Britain growing again. It’s time for a fresh start for our country and economy”.
Notes
- The calculations are based on estimates of the proportion of households in each constituency who own their home with a mortgage or loan. This was requested from the House of Commons Library using 2021 census data.
- This was combined with data sourced from Nomisweb.co.uk using the Annual Population Survey for 2021 on the number of households who live in each constituency overall. https://www.nomisweb.co.uk/
- In August 2022, the month before the government’s mini-budget, Moneyfacts said that a typical two-year fixed mortgage rate was 3.95%.https://www.thesun.co.uk/money/19414221/bank-england-interest-rates-hike-mortgage-bills-repayments/
- This month, Moneyfacts said a typical two-year fixed mortgage rate was 5.75 %.https://www.telegraph.co.uk/business/2023/01/09/mortgage-rates-almost-triple-nearly-800000-homeowners-year/
- Using house price data from the House of Commons Library, the analysis assumes an 80% loan to value ratio and compares how much would be paid at an interest rate of 3.95% and how much would be paid at 5.75%.
- https://commonslibrary.parliament.uk/constituency-data-house-prices/