Jamie Connor, 45, and his partner Kelly, 45, may be forced to sell their family home in Runcorn, which they moved into in June 2020 to provide a better life for their daughters Penny, eight, and Pippa, seven.
Although the couple utilised the Government’s help to buy scheme to purchase the new build property, the significant increase in mortgage rates and property prices could leave them struggling to keep up with their payments.
Jamie, who works as a courier for Fedex, expressed his anxiety to CheshireLive about what might happen when their current two-year fixed deal ends next June. He fears their monthly payments could skyrocket from around £720 to over £1,000, an amount they simply cannot afford.
In addition to their worries, they also have to repay an additional £21,000 for the help to buy loan that enabled them to secure the property, due to the surge in property prices. When they bought the property in Sandymoor, they agreed to pay back 20 percent of the house’s value, which was £41,000 at the time.
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Jamie and Kelly, a placement officer for looked after children at Halton Council, had planned to repay the help to buy loan before the interest kicked in after five years. However, the loan has now increased to £62,000 based on the property’s current valuation.
This additional amount would need to be added to their mortgage, resulting in a few hundred pounds added to their monthly payments. Jamie is concerned that if their mortgage payment exceeds £1,000, they would have to sell their home and either downsize or rent.
He expressed his disappointment at the possibility of this happening, as they moved to this property to provide a better life for their daughters and to alleviate concerns about their ability to play outside, as they did in their previous home.
Speaking about the impact on his family, Jamie said: “I’m stressed to death about losing our home all the time. I’m having sleepless nights. It’s awful. The worst case scenario is that we’d have to sell up and seriously downgrade and kiss goodbye to the life we’ve built here.
“This is like our forever home and I think about this and worry about it every day. Our interest rate is currently three percent but it could double to six percent.
“It’s not even out of the news so it’s not like you can avoid it. Rishi Sunak says there’s no easy fix and to hold your nerve but it’s alright saying that if you are a billionaire. It just shows the level of detachment from how people are struggling with all this.
He also highlighted the uncertainty surrounding the economy, saying: “Depending on how the economy goes we don’t even know if it’s going to plunge us into negative equity. The economy could crash and go into recession. We could pay off our help to buy loan and then prices could go down.”
Jamie explained that they have to put their lives on hold because they don’t know how much money they will need next year. They have had to forgo a holiday and may have to sell their tickets to the opening and closing ceremonies of the Olympics.
He said: “I keep saying all the time that we’ll prioritise a roof above our heads and every penny we have got will go on that. It’s tough. There’s not a lot to cut back on.”
Jamie and his family have also been impacted by the rising cost of living. He said: “We’ve already cut back on our shopping. We shop at Aldi and get the same things every time, yet the cost of getting a full trolley for our family shop has risen from £80 a fortnight around this time last year to around £100 a week now. That’s a ridiculous rise.
“We could cut back on TV subscriptions, for example, but when you haven’t got the money to go out you need something to look forward to.”
He added: “While it’s not impacting us at the moment I’m constantly stressing about it. We got a great rate of 1.9 percent on a two-year deal when we moved in. Then we got another two-year deal at just under three percent with the plan being to then pay off the help to buy loan, which is 20 percent the value of the house. Going up to just under three percent meant we had an increase of about £80 a month.”
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He explained the problem arose when house prices surged, causing the property’s value to increase by £100,000. As a result, they now have to repay a higher amount for the help to buy loan.
Jamie said they initially borrowed £41,000 through the help to buy scheme and did not anticipate such a significant increase. Currently, they are looking at having to repay £62,000.
Jamie has noticed a significant number of new build properties on the market during his courier travels and in his housing estate. He wonders if these homeowners are being forced to sell due to the rising mortgage rates.
Jamie is receiving support from his local MP Mike Amesbury, who has warned that over 10,000 families in his Weaver Vale constituency could face mortgage increases of £2,400. According to new analysis, the recent decision by the Bank of England to raise interest rates to five percent will have a devastating impact on many households.
Mr Amesbury stated that families in Weaver Vale, which includes areas like east Runcorn, Daresbury, Frodsham, Helsby, and Northwich, are already facing a “Tory mortgage penalty.” Labour’s research predicts that 10,200 households in Weaver Vale will experience a staggering £2,400 increase in their annual mortgage payments next year.
Mr Amesbury criticised the Conservative government’s management of the economy, saying: “The country is buckling under 13 years of Conservative mismanagement and a crashed economy, with families forced to pay a Tory mortgage penalty. People are asking themselves whether they or their family are better off under the Tories. The answer is no.”
He added Labour would prioritise financial and economic security, creating conditions for growth and opportunities for working people. He emphasised the need to prevent families from constantly living on the edge of financial instability.
Even before the recent interest rate hike, mortgage rates were already increasing. Data from Moneyfacts suggest the typical rate on a two-year fixed-rate loan has risen to nearly six percent, almost double the rate from a year ago. Many mortgage deals are also being withdrawn.
According to the Institute for Fiscal Studies, over a million households across Britain are expected to lose more than 20 percent of their disposable income due to the sharp rise in mortgage costs. Some economists have also warned of potential job losses and a severe recession.
The latest economic forecasts indicate that the UK is struggling to recover, with a predicted growth rate of just 0.2 percent for the year.
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