Cabinet minister Michael Gove has stated that assistance for individuals facing difficulties with their mortgages is currently "under review." However, any financial support would be a decision
for the Treasury, Gove informed Laura Kuenssberg.
He also cautioned against implementing assistance programs similar to those for Covid or energy bills, as they could potentially lead to further interest rate increases.
The Treasury, according to BBC sources, presently has no plans to provide mortgage relief.
When asked by Laura Kuenssberg on Sunday whether the government would consider intervening in the mortgage market, Gove stated that there is a distinction between reviewing and ruling out the possibility of a scheme comparable to the wage support provided during Covid.
Nonetheless, he expressed concern that if public funds were utilized to address specific crises, it would inevitably contribute to the national debt, which in turn would exert pressure on interest rates.
Gove added that individuals transitioning from fixed-rate mortgages are facing "significant increases" as part of a broader cost-of-living crisis. However, he emphasized that the key to addressing this issue is to reduce the pace of general price increases.
According to Gove, interest rate hikes by the Bank of England, aimed at controlling inflation, are already pushing up mortgage rates.
Implementing another substantial scheme to assist mortgage holders would increase UK debt and the government's payments on that debt, resulting in further interest rate hikes, he argued.
While the government does not want to issue another substantial check to households struggling to pay their bills, political pressure could eventually become too great for them not to act.
However, BBC sources indicate that the Treasury believes government intervention would contribute to inflation.
The Sunday Times reported that the Treasury has ruled out mortgage support due to this concern and other factors.
Instead, it is said that the Treasury will urge banks to do more to prevent people from losing their homes.
Pressure on individuals struggling with mortgages may increase further on Thursday, with some analysts predicting that the Bank of England will raise interest rates for the thirteenth consecutive time.
'Mentally and Financially Draining'
David Husbands, a 43-year-old property valuer from Chester-le-Street in County Durham, described his rising mortgage payments as "crippling."
Since early 2022, his payments have increased from around £300 per month to over £600.
"Because interest rates have skyrocketed, I'm lucky if I have £100 left to live on at the end of each month," he said. "I've had to take on additional casual work elsewhere."
Husbands finds the situation "mentally exhausting" and "very stressful," as he finishes work at 5:30 pm and then performs as a casual DJ until midnight.
He fell into negative equity during the 2008 financial crash and does not have enough money to renovate his house in order to sell it and break even.
He and his husband have also postponed their plans to adopt.
"Right now, we don't feel confident that we can provide a secure, safe, and comfortable home for a child," he said.
Under Pressure
Hundreds of thousands of individuals are facing substantial increases in their mortgage rates due to rising interest rates.
According to the Resolution Foundation think tank, individuals seeking to remortgage their homes will pay an average of £2,900 more per year from 2024.
The think tank predicts that the average two-year fixed-rate deal will reach 6.25% later this year, resulting in a "mortgage crunch" in the UK.
There is already a government scheme in place to assist individuals on benefits, called the Support for Mortgage Interest scheme. However, the Treasury relies on banks to support struggling mortgage holders.