The West of England is “still paying the price” of Liz Truss’s so-called ‘mini-budget’, the region’s directly elected Labour Mayor Dan Norris has warned.
A year on from the former PM’s budget, the housing market has hit its worst slump since the Credit Church thanks to soaring mortgage rates seen in the past 12 months.
Mortgage approvals are down by a third, house values are down 5% and the average monthly mortgage payment is up by £220 almost one year to the day since the disastrous Kamikaze Budget, according to the Royal Institution of Chartered Surveyors.
But the situation is likely to get worse, according to Norris, with data from his West of England Mayoral Authority showing a quarter of all households in the West have fixed-term mortgages concluding in the next 12 months and so face a shocking repayment rise of nearly £2,600.
This means a further ‘mortgage bomb’ hitting the West of England region of around £67 million in the next year, according to the figures, because the Government crashed the economy.
Ahead of the anniversary of the mini-budget later this week, Mayor Norris, who has responsibility for regional economic development, argued that households across his patch are still dealing with the “hangover” of the Truss experiment.
He urged the current PM to stand up to his backbenchers and solve the country’s “growing list of problems” – including the mortgage price crisis. He wants ministers to step in to ensure that rising mortgage costs don’t result in a wave of repossessions, including considering proposals like reinstating mortgage payment holidays.
He said: “One year on, and households in the West of England, and across the country, are still dealing with the hangover of Truss and her so-called ‘mini-Budget’.
“Mortgage approvals down by a third since last year. 5% wiped off the value of houses in the region. Rents spiralling. Plus a mortgage bomb about to hit a quarter of all households in the West. All because the Government crashed the economy.
“This mortgage penalty has been a bitter blow for families, which is I’m calling on the PM to stand up to the factions in his party, choose the side of working people in the West of England and take the urgent steps necessary to solve this country’s growing list of problems, not least protecting homeowners through this crisis this year and next.”
Liz Truss’s premiership collapsed in the wake of her mini-budget on 23 September 2022, which included £45 billion of unfunded tax cuts, and which crashed the economy.