The SNP has challenged Rishi Sunak and Sir Keir Starmer to do more to help families with the soaring cost of living – as new analysis shows the impact of the UK mortgage crisis in Scotland.
The analysis, commissioned by the SNP, shows that following the Bank of England’s latest interest rate rise to 5.25% on 3rd August, a typical family in Scotland, on an average two-year fixed-rate mortgage of 6.85%, would be paying around £1,130 a month.
That is a staggering £439 more in interest per month, and £5,268 more in interest a year, than that same family would have paid for a two-year fixed-rate mortgage less than two years ago, in November 2021.
In total, the monthly cost of an average £166,431 two-year fixed-rate mortgage in Scotland has risen by almost two thirds (63%) from £691 a month to £1,130.
In November 2021, the average two-year fix was 2.29% but now, following the fourteenth consecutive interest rate rise last week, it’s 6.85%.
According to the latest ONS figures for household expenditure, the increase in interest paid on an average two-year fixed-rate mortgage is more than the total annual spending for an average household on food shopping (£3,234.40), clothing (£915.20), telephone and internet (£1102.40).
It follows warnings by leading economists, including former Bank of England governor Mark Carney, that Brexit is a leading cause of the UK’s higher and more stubborn rate of inflation, which has caused UK mortgage rates to rise to higher levels than our European neighbours.
Commenting, the SNP’s Housing spokesperson Chris Stephens MP said:
“The Tories and pro-Brexit Labour Party have trashed the UK economy – and millions of households across Scotland are paying the price as the cost of living in the UK soars.
“It’s essential the UK government follows Scotland’s lead and does more to help people with the cost of living, including by matching progressive policies like the Scottish Child Payment and by helping those who are struggling to pay sky-high mortgages and rents.
“The SNP is the only party offering real help with the cost of living – and a fairer and wealthier future with independence.
“In contrast, Sunak and Starmer are making the UK’s cost of living crisis worse by imposing damaging cuts to household incomes and Brexit, which has fuelled inflation, increased mortgage rates and caused long-term damage to the economy.
“At the next election, voting SNP is the only way to secure independence, tackle the cost of living and escape the damage of Westminster control for good.”