First-time buyers’ mortgage bills up by £500 a month, Labour says

First-time buyers have faced a nearly £500-a-month increase in mortgage bills due to soaring rates under Liz Truss’s government, Labour research has found.

Monthly payments, based on the two-year fixed rate and average advance for those looking to get a mortgage for the first time, rose from £837 in January 2022 to £1,303 in December, according to the party’s analysis.

Unfunded tax cuts in then-prime minister Ms Truss’s mini-budget last September sent the value of the pound tumbling and drove up mortgage rates, although they have started to reduce in recent weeks.

The Tory mortgage penalty is devastating family finances, destroying dreams and holding back our economy

Shadow chancellor Rachel Reeves will repeat Labour’s pledge to help more first-time buyers onto the ladder when she visits a community bank in Brighton on Tuesday.

The plans include giving them first dibs on new-built homes, a mortgage guarantee scheme, and an end to entire developments being sold off-plan to overseas investors.

Labour, which is pitching itself as the party of home ownership in the run-up to the May local elections, would also reform planning and compulsory purchase rules to build more affordable homes.

Speaking ahead of the visit, Ms Reeves said: “The Tory mortgage penalty is devastating family finances, destroying dreams and holding back our economy.

“There is so much promise and potential in Britain, that we can unlock if we can have a government that will put working people first and get the economy growing.

“That is what Labour will always do. Right now, we’d be freezing council tax, funded by a proper windfall tax on oil and gas giants to help ease the cost-of-living crisis facing so many.

“And as the party of home ownership, we’d be putting in place a plan to help make those hopes of home ownership realised.”