Michael Gove says mortgage assistance is “under review.”
Help for people struggling with their mortgages is being kept “under review,” according to cabinet minister Michael Gove.
However, any financial help will be determined by the Treasury, he told Laura Kuennsberg.
He also warned that any assistance comparable to Covid or energy bill plans risked driving interest rates much higher.
According to the BBC, the Treasury has no current plans to provide mortgage relief.
When asked by Laura Kuenssberg on Sunday whether the government would consider entering the mortgage market, Mr Gove said there is a “difference between keeping under review and ruling out” a plan comparable to the salaries support provided under Covid.
However, he stated that if public funds are spent to “deal with specific crises,” “you are inevitably adding to the stock of public debt,” putting pressure on interest rates.
“The worst thing to do would be to spend money to provide short-term relief, which would then mean that our overall finances were in a weaker position, interest rates were higher for longer, and inflation was higher for longer,” Mr Gove continued.
He stated that consumers who are getting out of fixed-rate mortgages face “significant increases,” which is part of a larger cost of living challenge, but the way to deal with it is to slow the rate of general price increases.
Mr Gove stated that the Bank of England’s interest rate hikes to combat inflation are already raising mortgage rates.
Another large scheme to bail out mortgage holders would increase UK debt and government payments on that debt, he added, raising interest rates even further.
The government has no inclination to issue another large check to homeowners who are unable to pay their payments, but political pressure may eventually become too much for them to ignore.