Mortgage rise impact ‘will dwarf energy bills crisis’ for UK homeowners

theguardian.com:

The growing mortgage timebomb facing millions of households will “dwarf the energy bill crisis” for many middle earners, ministers are being warned, amid new evidence that Labour is amassing a huge lead among mortgage payers.

The spiralling costs of energy dominated the concerns of ministers last autumn, before they were forced to intervene as annual costs soared. However, analysis seen by the Observer shows that some households will face paying more than £5,000 a year extra on their mortgages as a result of rising rates – far in excess of the extra energy costs they faced.

One Tory MP called on the government to look at “politically unpalatable” options to help spread the pain of tackling inflation away from mortgage holders, such as slashing state-backed support for the wealthy.

In a sign of the pressure that Rishi Sunak and chancellor Jeremy Hunt are already under, the latest Opinium poll for the Observer suggests Labour now has a 31-point lead among mortgage holders, up from a 19-point lead in April. Labour’s support among the group has increased from 44% to 53%.

With more than 2.4m fixed-rate homeowner mortgage deals due to expire by the end of 2024 and average two-year deals now above 6%, many could see their interest rate triple over the coming months. Interest rates are now at the highest level since the 2008 financial crisis after the Bank of England’s shock decision to raise raised them to 5% last week.

Analysis for the Observer by the Public First consultancy found that the impact of mortgage rises could be far in excess of the surge in energy bills for certain households. Those with typical-size mortgages in London and the home counties could easily see their mortgage rise by £5,000 or more per year compared to