Fears more than 11,000 households in Northumberland will see spike in mortgage costs

According to research conducted by the local Labour Group, 11,629 households in the county will see their mortgage repayments increase as their fixed-rate deals come to an end following increases in the Bank of England’s base rate, which are expected to top six per cent next year.

The bank was forced to act due to chaos in the financial markets following former chancellor Kwasi Kwarteng’s “mini budget” that was reversed by his successor Jeremy Hunt on Monday after just three weeks.

The Labour Party used Bank of England data to show the number of homeowners coming off two-year fixed-term mortgages in October 2022 – who are set to pay an average of £500 a month more following the increases in the interest rate. However, this is likely to be lower in the North East due to lower average house prices.

The bank hiked interest rates by 0.5 per cent to 2.25% on September 22, with further rises expected in a bid to curb inflation.

The party has said that further investigation found that the number of people facing the refinancing of their mortgage deals on those terms is forecast to be 1.8 million people from a total of 6.8 million mortgage holders – equating to one in four of all mortgage holders in the UK. From those figures, the party has estimated the figure from Northumberland.

Scott Dickinson Northumberland Labour Leader said: “I really fear for those hard-working families who have a mortgage and are already on the breadline.

“With the catastrophic economic policy and position people now find themselves in with the cost of living crisis, the increase in payments will see many lose their homes.

“Economic stability to support families, and businesses and the wider implications of this mess is now critical but I fear too late for many. The Government needs an aid package to support people who have, through no fault of their own been plunged into this mess. Northumberland deserves better and so does the UK.”

It comes after the chancellor addressed the House of Commons on Monday, and acknowledged the country was now facing serious financial issues following the effects of the mini-budget.