Labour’s Shadow Chancellor, Rachel Reeves MP, has spoken in an interview with the Times newspaper about LTFRMs, backing their expansion and acknowledging the hugely positive effect they can have on the UK mortgage market.
Ahead of her trip to Davos and the Labour Party’s pending Financial Services review, Reeves told the Times, “In other parts of the world the housing market is less exposed to changes in interest rates than it is in Britain. More people are locked into longer mortgages. As a result, when you have volatility in mortgage rates, [which] we’ve seen on stilts in the UK, people are less affected in their pockets.
“If you are locked in for a 10, 25-year mortgage, those stress tests become redundant. Potentially you would be able to borrow a bit more, to put down a bit less of a deposit. If you can take out some of that stress and instability, that will make a difference.”
Reeves was clear that she wants to see the UK mortgage market move away from its addiction to short term deals. “For a lot of people, especially for families, those longer-term deals might make more sense,” she said.
The LTFRM Alliance is thrilled that the Labour Party gets the benefits that LTFRMs can offer to UK borrowers and to the UK mortgage and housing market as a whole.
We hope they will continue to look at the merits of an expanded Mortgage Guarantee scheme, which would offer greater certainty to borrowers and which, evidence from other countries around the world indicates, will be cost neutral overall.