A Tory minister was confronted by a first-time buyer whose mortgage offer has soared from 4.5% to 10.5% since the mini-Budget. A Question Time panel in Manchester was told by audience member, Rabia, that the lender had more than doubled the interest rate on her prospective mortgage.
Lenders have been withdrawing mortgage products amid fears of rising interest rates following the Government's mini-Budget, reports The Mirror. Liz Truss and Chancellor Kwasi Kwarteng are under mounting pressure to calm market turmoil, which has seen the pound tank against the dollar and a rise in the cost of Government borrowing.
Tory Minister Paul Scully came under pressure from audience member Rabia on Question Time, who said she couldn't afford to get a mortgage. She said: "I was actually in the process of getting a mortgage as a young person and I was told my initial interest rate would be 4.5%.
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"I was told today that the lender has pulled that offer and now the best offer I can get is about 10.5%." Her comments were met with gasps and shocked mutters of "wow" from other spectators in the audience.
"They are saying 'you need to immediately look at putting your application through because if you don't the lenders may even pull these offers'," Rabia said. "For me now, as a first-time buyer, I don't think I can now afford to get a mortgage."
Mr Scully said there were more mortgage offers around than 10 years ago but accepted that there were challenges. He compared the situation to the start of the Covid pandemic, saying: "Those first few weeks were really difficult as businesses tried to find certainty."
The audience laughed derisively as host Fiona Bruce intervened to say: "That was caused by a pandemic". Mr Scully said: "The certainty we want to give is through, first of all, communicating far better, far clearer."
Pressed on what he could say to Rabia, he said: "I'm trying to make sure we can settle down the lending market so she can get a better deal." It comes as the PM and the Chancellor were due to meet the head of the Office for Budget Responsibility (OBR) in an attempt to calm spooked markets over last week's mini-budget.
Treasury and Downing Street sources hit back at suggestions it was an emergency meeting, while Treasury minister Andrew Griffith played down its significance, labelling it a "very good idea".
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