In an unusual move, London Labour Mayor Sadiq Khan says home owners in dire financial difficulties should be able to switch tenure.
Khan says: “Owners in significant difficulty [should be allowed] to switch their housing tenure to affordable rented or shared equity to allow them to remain in their homes.”
The call comes in a lengthy statement from the Mayor in which he calls for government help for hard pressed mortgage payers in London.
Khan says hundreds of thousands of London homeowners could face a mortgage timebomb next year, placing financial strain on households already struggling to cope with the cost of living crisis.
His team’s new analysis claims that 384,000 London households have been hit by rising mortgage rates since the mini-Budget last October.
He says separate research by the Institute for Fiscal Studies shows that the additional cost to households in London is around £520 a month.
Khan adds that an estimated further 209,000 London households could see their mortgage payments rise over the next year as they come off their current fixed rate deals.
He is calling on the government to reinstate mortgage payment holidays, reverse cuts to support for mortgage interest through the social security system, and allow owners in significant difficulty to switch their housing tenure to affordable rented or shared equity to allow them to remain in their homes.
Khan says: “Many London homeowners already face sizable monthly mortgage payments alongside rising costs and put simply, they are struggling to cope.
“Hundreds of thousands more London households will see their mortgages skyrocket this year and next, with those on lower incomes at greatest risk of defaulting on their mortgage payments, getting into debt, or losing their homes.
“The Government have so far failed to recognise the scale of the crisis – I’m calling on Ministers to take urgent steps to protect London’s homeowners from the devastating impacts of high mortgage rates.”
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