Cost-of-living crisis: Labour warns of ‘eye-watering’ cost of ‘Tory mortgage bombshell’ in Scotland

Rachel Reeves said families ‘are being hit hard’ across Scotland

More than 546,000 households will pay an average of £190 more a month on their mortgages next year, Labour has warned.

The party said it would not stand by as Scots face “eye-watering” rises due to “Tory economic failure”.

It comes ahead of a visit to the Centrica Green Skills Centre in Glasgow by Labour’s shadow chancellor Rachel Reeves and shadow business secretary Jonathan Reynolds. The pair will be joined by Scottish Labour leader Anas Sarwar.

Labour shadow chancellor Rachel Reeves

Labour said 51,700 homes in Edinburgh will be affected, with those remortgaging next year paying £280 more a month. The same number will be affected in Glasgow, with those remortgaging next year paying £180 more a month.

Labour’s plan would see banks forced to help mortgage holders struggling with payments, with the party urging the Government to compel lenders to allow borrowers to temporarily switch to interest-only payments or lengthen their mortgage period.

Banks would also have to wait at least six months before starting repossession proceedings as part of a five-point plan Labour believes would bring relief to mortgage holders.

By failing to make its own measures mandatory, Labour said the Government is allowing households across Scotland to miss out on the mortgage support they need.

Ms Reeves said: “Across Scotland, families are being hit hard by the toxic combination of a Tory mortgage bombshell and an incompetent SNP distracted by scandal. Unlike both these governments, Labour will not stand by while Scots face the reality of those failures.

“Not only has their economic recklessness driven this crisis, but this Tory Government's failure to make its measures mandatory leaves households across Scotland missing out on the mortgage support they need.

“Labour’s mandatory plan and our mortgage rescue scheme to ease the Tory mortgage bombshell offers Scottish families practical help now, while our commitment to fiscal responsibility and growth will secure our economy for the future.”

Chancellor Jeremy Hunt previously agreed with lenders that mortgage holders struggling with repayments would be given a 12-month grace period before repossessions begin, with borrowers also able to extend the term of their mortgages or move to an interest-only plan temporarily “no questions asked”.