Mortgage help ‘under review’, says Michael Gove

Help for people struggling with their mortgages is being kept “under review”, housing secretary Michael Gove has said.

But any financial assistance would be a decision for the Treasury, he told Sunday with Laura Kuenssberg.

According to the BBC, the Treasury has no current plans to give mortgage relief.

It comes as the average interest rate on a new two-year fixed mortgage is likely to exceed 6% in the coming days as lenders grapple with upheaval in the sector.

Asked on Sunday with Laura Kuenssberg whether the government would consider stepping in to help those struggling to repay their loans, Gove appeared to rule out any help similar to Covid or energy bill schemes, as there are fears that this could push up interest rates further.

He said there is a “difference between keeping under review and ruling out” a scheme similar to the wage support given during Covid.

“The worst thing to do would be to spend money to provide a short-term relief which would then mean that our overall finances were in a weaker position, and interest rates were higher for longer, and inflation was higher for longer,” Gove said.

A Treasury source added that a bailout for homeowners would be “self-defeating” because it would push up inflation and prompt the Bank of England to further raise interest rates.

The Sunday Times reported that the Treasury has ruled out mortgage support for this and other reasons. Instead, it will ask banks to do more to stop people losing their homes.

This article is taken from Property Industry Eye.

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