Chancellor Jeremy Hunt is facing calls for swift action to prevent people from losing their homes over the festive season, amid warnings that tens of thousands of households face huge rises in housing bills in the final weeks of 2022.
Liberal Democrat leader Sir Ed Davey called for an emergency ban on bank repossessions over the Christmas period, similar to protections offered to mortgage holders during the Covid lockdowns.
And he said the government should immediately implement its long-promised ban on no-fault evictions to protect renters, along with a moratorium on evictions based on rent arrears.
Liberal Democrat figures suggest that around 62,500 households will face steep rises in mortgage repayments over the period 14-31 December, as they are forced onto less favourable terms as their deals come up for renegotiation.
Households renegotiating their mortgages over the coming weeks are estimated to be facing an average of £3,000 added to annual bills, with extra uncertainty for those moving from fixed-rate to variable deals.
And a rising proportion are likely to see homes repossessed by lenders. The total of 3,860 cases in the courts between July and September was up 30 per cent on the previous year, and the Bank of England has hiked interest rates twice since then, with another rise expected on Thursday.
Liberal Democrats are proposing a new Mortgage Protection Fund, offering grants of up to £300 a month to protect anyone whose mortgage payments rise by more than 10 per cent of their household income.
Sir Ed said: “Thousands of families are facing a nightmare before Christmas as their monthly mortgage payments go through the roof.
“The Conservative government put hundreds of pounds on people’s mortgages through their disastrous mini-Budget. The very least they could now do is to take responsibility for fixing this mess and protecting homeowners on the brink.
“Jeremy Hunt must act now before it’s too late, by bringing in a temporary ban on home repossessions and a mortgage rescue fund to support those hardest hit. The government must also finally bring in its long-promised ban on no-fault evictions to protect renters at risk of homelessness this winter.
“No one should face losing their home this Christmas because the Conservative government crashed the economy.”
A government spokesperson said: “We are protecting vulnerable families from homelessness this winter with an extra £50 million to prevent evictions and secure new places for people to live.
“The chancellor has recently met with the UK’s largest lenders to do all they can to support mortgage holders in financial difficulty and we are providing cost of living payments worth £1,200 to the 8 million most vulnerable families. This is in addition to capping people’s energy bills this winter and next.
“Ensuring a fair deal for renters remains a priority for the government, that’s why we will deliver on our commitment to abolish Section 21 ‘no fault’ evictions.”
