Labour stepped up warnings of a “Tory mortgage bombshell” hitting households ahead of a meeting with major brokers.
Shadow chancellor Rachel Reeves and shadow housing secretary Lisa Nandy convened the meeting as average two-year fixed mortgages hit a 15-year high.
As well as the impact of rising mortgage rates, the Opposition also hit out at Rishi Sunak’s government over the failure to set mandatory targets on the supply of new homes, warning that could lead to “hundreds of thousands” of people unable to afford a property.
The typical two-year fixed-rate residential mortgage on the market reached 6.66% on Tuesday, Moneyfactscompare.co.uk said.
Senior representatives from major mortgage brokers and financial advisers, including Mortgage Advice Bureau, Censeo Financial and Quilter, will meet Labour to discuss the impact of rising interest rates.
The party also pointed to analysis produced by planning consultants Lichfields which suggested Mr Sunak’s decision to abandon mandatory targets for housebuilding as part of a plan to reach 300,000 new homes a year would lead to an increase in “sofa surfing”.
The local targets were ditched following a revolt by Tory MPs and grassroots Conservatives.
The Lichfields analysis suggested a shortfall of 77,000 homes a year below the 300,000 ambition, resulting in an increase of 580,000 “sofa surfers” and concealed households by 2030.
Ms Nandy said: “Across Britain, people are being hit hard by a Tory mortgage bombshell.
“Hundreds of thousands more households are at risk of being unable to afford a place to call home because the Prime Minister put appeasing his own MPs ahead of building the homes our country needs.
“While Rishi Sunak stands on the sidelines with his fingers in his ears, Labour has a plan to start fixing the housing crisis.”
She said Labour would make a package of support for struggling mortgage-holders mandatory rather than voluntary, would give greater rights to renters and “take the tough choices to get Britain building.”
A Conservative Party spokesman said: “The Labour Party have a £28 billion borrowing plan which would hike up inflation and cause interest rates, and people’s mortgages, to rise.
“We won’t take any lessons from Labour while they’re advocating this irresponsible and dangerous borrowing plan that would hurt millions.
“We have acted immediately to ensure lenders are supporting homeowners as we work on our priority to halve inflation which will have the biggest impact in reducing people’s mortgage payments.”
