Rishi Sunak faces ‘Blue Wall’ mortgage time bomb with Tory seats worst hit by rate hikes
“Blue wall” seats in the South-East of England are set to take the largest financial hit from the hike in mortgage rates due to high levels of borrowing in the area.
Conservative-held constituencies in and around London will be targeted by Labour and the Liberal Democrats at the next general election using the argument that the Government has driven up mortgage costs, i understands.
A new poll of the “blue wall” by Redfield & Wilton Strategies has found that Labour is seven percentage points ahead of the Tories in the region, with 38 per cent of the vote compared to the Conservatives’ 31 per cent and the Lib Dems on 22 per cent.
And a leading pollster warned that the looming squeeze could undermine the Government’s attempts to rebuild its reputation for economic competence.
The Resolution Foundation has estimated that around 6.5 million British households will have remortgaged at a higher rate by the end of 2026, with the average additional bill for those taking out a new fixed-rate deal next year likely to stand at £2,900.
Labour analysis of each constituency in England and Wales suggests that the worst-affected areas – those with large numbers of mortgage holders and high house prices – are concentrated in the South.
The calculations are based on census data covering the number of people who own their home with a mortgage, and adjusting the average figure of £2,900 based on local house prices.
Seats where more than 10,000 households are remortgaging and the annual hit is set to exceed £6,000 – £500 a month – include Esher and Walton, Epsom and Ewell and Wokingham, all prosperous seats held by high-profile Conservatives where the Liberal Democrats are hoping to make gains.
Former Deputy Prime Minister is the MP for Esher and Walton, Chris Grayling, the former transport secretary represents Epsom and Ewell and veteran Sir John Redwood represents Wokingham.
Chipping Barnet, Finchley and Golders Green and Hertsmere are all Labour targets where the number of affected households and the average amount they will have to pay are both significantly higher than average.
Jeremy Hunt’s own constituency of South West Surrey has 11,600 households remortgaging at a potential cost of £5,600 each, making it one of the most heavily affected areas.
Conservative MP Bob Stewart, whose Beckenham seat has 10,600 families needed to take out a new mortgage and an average cost of £5,900, pleaded with ministers to double down on their efforts to reduce living costs.
He said in the House of Commons: “I’m getting huge numbers of constituents coming to me about the mortgage changes. They are absolutely terrified. I know the Government is doing all it can – can I ask the Government to redouble its efforts because this is going to have a huge impact on cost of living?”
Rachel Reeves, the shadow Chancellor, warned Mr Hunt that the two seats Labour is hoping to win in upcoming by-elections were also facing a major financial hit.
She said: “In Selby and Ainsty, 12,000 households will be paying, on average, £2,700 more on their mortgage. In Uxbridge and South Ruislip, 10,000 households will be paying, on average, £5,200 more. Each and every family know who is responsible for trashing the economy: the Conservative party. Will the Chancellor apologise for the harm that his Government have caused with the Tory mortgage penalty?”
Joe Twyman of Deltapoll told i: “For the last couple of months, the question of economic competence has started to close, but this could all be undermined by the creeping crisis. More and more people are going to come off fixed rate mortgages and how the Government acts could be quite decisive for voters.”
Both Labour and the Lib Dems are seeking to blame Liz Truss’s chaotic “mini Budget” for the increase in interest rates, which the Government says is primarily due to global factors. Mr Hunt told Ms Reeves: “I am proud of our economic record, which has seen our economy grow faster than those of France and Japan since 2010, and at the same rate as Germany.”
