MP forecasts debt woes for homeowners

Mr Cable suggests that the Bank of England’s decision to maintain the cost of borrowing this month will not spare homeowners a host of debt management worries in the current climate of rising interest rates.

Part of the problem is that the millions of people who secured a fixed-rate mortgage arrangement a number of years ago will be liable to a sharp increase in their repayment rates when their current deal expires, Mr Cable claims.

“[The interest rate hold] will come as a relief to many homeowners, but those coming off fixed-rate mortgages now will already be hit very hard because of the rises over the past year,” he asaid.

“Rising repossessions due to higher interest rates could easily lead to a significant slide in house prices, as happened in the late 1980s,” he added.

The cost of borrowing has been increased on four occasions by the Bank of England since August of last year, putting more pressure on household incomes across the country.