UK Government turns to Martin Lewis for advice

Martin Lewis offered his advice Credit: Dhjeekw Creative Commons

UK Government turns to Martin Lewis for advice as he was invited to a high-level meeting which included major mortgage lenders and the Financial Conduct Authority on December 7.

Chancellor of the Exchequer Jeremy Hunt is obviously very worried about the impact that the cost-of-living crisis and subsequent increase in base rates by the Bank of England will have on consumers, especially those with mortgages.

Generally speaking, for home owners, their largest monthly outlay involves repayment of mortgages and any increase coupled with the inexorable rise in the price of energy could potentially be crippling for the average family.

At the meeting, lenders committed to help all their customers by:

  1. enabling customers who are up to date with payments to switch to a new competitive, mortgage deal without another affordability test.
  2. providing well-timed information to help customers plan ahead should their current rate be due to end.
  3. offering tailored support to those who start to struggle with payments which will vary by lender, but may include extending the term of the mortgage to make monthly payments lower, a short-term reduction in monthly payments or accepting interest-only payments for a period where appropriate.
  4. ensuring highly trained and experienced staff are on hand to help where needed.

The government said that it would make support for mortgage interest easier to access and those receiving universal credit may be able to receive help with their mortgage interest payments after three months

Mortgage lenders, the FCA and the government will continue working closely together to ensure that the mortgage market works well for all homeowners, in particular those facing financial difficulty.

Martin Lewis, founder of MoneySavingExpert.com, said:

“The major concern for people’s mortgages – and the knock-on impact of mortgage increases on rents – is the situation in the spring, when we expect interest rates to be higher, energy prices to be rising, and other cost of living impacts.

“So, the most important thing is that now the conversations have started about what flexibility and forbearance measures can be put in place to help those struggling. The commitments today set a good direction, and after helpful conversations I’m hopeful that further progress will be made. For those worried about making mortgage repayments, the sooner you communicate with your lender the better.”

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