Omitting BTL landlords from the government’s mortgage charter will only hurt supply and push up rents as landlords are forced to pass on their costs, says Labour.
The new agreement revealed by the Chancellor this week between the UK’s largest mortgage lenders and the Financial Conduct Authority aims to provide a set of universal standards to help and reassure borrowers worried by high interest rates.
Borrowers won’t be forced to leave their home without their consent, unless in exceptional circumstances, in less than a year from their first missed payment, while those approaching the end of a fixed rate deal have the chance to lock in a deal up to six months ahead, starting from 10th July.
Ignorant
However, during a debate on mortgage and rental costs, Shadow Chancellor Rachel Reeves (pictured) asked ministers if they had considered the consequences of not including BTL mortgages.
“Treasury Ministers remain ignorant or indifferent to the plight of renters,” she told the Commons.
“The Tory mortgage bombshell is experienced whether people have a mortgage or not. Renters are seeing huge increases in their rents – on average 10% in the last year. Renters right now are exposed to their landlords passing the higher costs of their mortgages on to their tenants.”
Many of her Labour colleagues echoed Reeves’ concern, including Derek Twigg MP who said he had been contacted by an increasing number of constituents whose landlords were being forced to sell up as they couldn’t afford their own mortgages.
Chief Secretary to the Treasury, John Glen (pictured), replied that the agreement included a growing number of lenders. “I hope that more and more lenders will be added to those 85% of providers. The details will be known in the next few weeks.”
