CHANCELLOR Jeremy Hunt has agreed measures with lenders aimed at helping mortgage holders struggling with high interest rates but has resisted offering Government support.
After summoning banks and building societies to Downing Street to help quell the crisis on Friday, Hunt said they agreed to implementing a 12-month minimum before repossessing homes.
He also said the lenders agreed to allow struggling borrowers to extend the term of their mortgages or move to an interest-only plan temporarily with “no questions asked”.
Hunt met with the bosses of HSBC, Santander and Barclays among others after a shock interest rate hike threatened further pain for struggling households.
Speaking to broadcasters, Hunt said they are most concerned about families who could lose their homes and those whose payments could soar as their fixed-term rates come to an end.
He said they agreed to give more flexibility to those “anxious” about their finances by letting them switch to interest-only payments or extend the length of their mortgages before reverting to the original terms within six months “no questions asked, no impact on your credit score”.
“That, I think, is going to give people a lot of comfort and stop people worrying about having conversations with their banks when they are worried about their financial situation,” he said.
There will also be more leeway for those facing losing their homes.
“The last thing that they want to do is to repossess a home, but in that extreme situation they have agreed there will be a minimum 12-month period before there’s a repossession without consent,” Hunt said.
The Chancellor stressed that tackling stubbornly high inflation, which measures the rate of rising prices and is behind the Bank of England’s repeated hiking of interest rates, is the “number one priority”.
But he was resisting giving into calls from some Tory backbenchers to offer a major support package to mortgage holders, fearing it could further fuel inflation.
He said ministers must instead be “totally resolved and unflinching” in cooling prices.
