The rate of interest rise for mortgages needs to be seriously examined. Remember the financial institutions were bailed out in 2008/9 and recovered. 

Now is  the time for a bail out for mortgage holders.

SOLUTION –  a 3-5yr suspension of capital repayments and monthly repayments based only of interest.

(Various schemes could be initiated to cover the needs of individual mortgage holders hence the suggestion of a 3-5 years process. There could be variation in interest rates to meet financial circumstances but the overall affect would be an immediate and considerable reduction in monthly repayments).

This would be neutral free to the exchequer 

Those old enough will remember the MIRAS scheme which provided a fiscal incentive to homeowners to borrow with certain tax relief. 

Under the provisions of FA1999, mortgage interest relief (MIR) and the Mortgage Interest Relief At Source (MIRAS) scheme were withdrawn from 6 April 2000. (Relief for new loans to an elderly person to purchase a life annuity (normally referred to as home income plans) was withdrawn from 9 March 1999).

This was abolished under the Labour government Brown economic strategy (only benefits the well off). 

Today we should be encouraging homeownership and making it possible to ease mortgage applications and how they are financed. The Chancellor has said we are entering a new era and this approach could benefit a lot of people. Nothing so far from government about how mortgages and interest rates are to be managed.

Those wanting to own their own home should be encouraged to take out a mortgage and by having an interest only mortgage scheme they would be given the incentive to use that saving to improve their living standards. That process helping the cost of living affecting everybody.

Those renting have to continue to pay their rent during times of financial hardship and even after retirement. They up/down size as their situation changes. As do homeowners, Incentive to buy as against rent must benefit them. The financial situation can be managed by interest only mortgages

The banks are already lending capital sums on house purchases. Through the securitisation process mortgage lenders offset their potential risk to many other financial and investment operators. Their profit comes from interest charged on lending so no loss of profit for the financial services sector under this proposal.

No cost to the government exchequer as the whole process initiated in the private sector. Specialised lending rules and powers could however be initiated that would guarantee some economic control.

Coupled with all the above a reform of the planning regime and building more houses creates jobs, not just for builders but other trades too. That in turn allows more funds to circulate in the economy making an area more prosperous and economic growth emerges.

Those wanting to purchase a house would have more choice in the way they live and assist their economic position. It would additionally aid the levelling up strategy throughout the U.K. 

All the above could be created quickly following a detailed urgent study.

Happy to provide more information.

WILFRED ASPINALL

Doddingselles, Pirton, Hertfordshire, SG5 3FR

Tel: +447872953922    Email:  wilfredaspinall@me.com