JEREMY Hunt met with mortgage lenders in Downing Street this morning as interest rates wreak misery on the housing market.
The Chancellor grilled banking chiefs on their plans to help homeowners struggling with loan repayments.
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Among those in attendance at the summit were the CEOs of Lloyds, Santander UK, Nationwide, Barclays UK, NatWest, HSBC and Virgin Money.
Mr Hunt asked whether various options are being offered to customers, including extending mortgage terms, allowing repayment holidays and switching to interest-only.
It comes as the Bank of England yesterday hiked interest rates by 0.5% to a staggering 5%, the highest level since September 2008.
The hike was imposed in an effort to curb stubborn inflation, which is sitting at 8.7% for the second month in a row.
Bank of England chief Andrew Bailey faced fury from Tory MPs over his handling of inflation.
John Baron said: “Consumers and households are paying the price for the Bank of England being asleep at the wheel.”
Brendan Clarke-Smith added: “I hope for everybody’s sake the latest move works because people are now not only questioning the Bank’s independence, but also their leadership.”
Rapid interest rate rises have placed homeowners under huge pressure, with many arguing they can no longer afford their house.
The average rate on a two-year fixed deal has now soared to 6.01 per cent.
And a typical five-year fixed deal is 5.67 per cent.
Meanwhile, research from the Institute for Fiscal Studies found 1.4 million people are set to lose 20% of their disposable income.
On average, mortgage holders will see repayments hiked by £280 per month – equivalent to 8.3% of disposable income.
And the biggest rise will hit homeowners in their 30s, with payments jumping by £360 per month, or 11% of disposable income.
The Chancellor and Rishi Sunak ruled out direct cash boosts to help households pay mortgages.
The PM yesterday warned: “I’ve got to make sure government is doing everything that it needs to do and that means being responsible with our borrowing.
“We cannot be in a situation like this and borrow too much money because that just makes everything works.
“I can’t say yes to every single thing that people want me to spend more money on.”
At a PM Connect event in Kent, Mr Sunak sought to assure the public “we’re going to get through it”.
“I’m totally 100% on it,” he insisted.
“It’s going to be ok.”
But Mr Sunak added: “It’s not easy.
“Stamping out inflation is not easy. It requires difficult decisions and doesn’t happen overnight.
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“But if we don’t get on top of it, it will just get worse and it will last longer.
“That’s not going to do anyone any favours, it’s not going to be good for you and your families in the long run.”
