Mortgage holders to get 12-month grace period before repossessions amid interest rate hike
Mortgage lenders and Chancellor Jeremy Hunt have agreed that people should be given a 12-month break before repossession proceedings start amid soaring interest rates.
After the rise of the base rate to 5%, Mr Hunt met with leaders of financial institutions including Lloyds, NatWest, Barclays and Virgin Money.
They agreed that the repossession break should be introduced – similar to the one implemented during COVID.
Politics latest: Chancellor meets with mortgage lenders after interest rate hike
Mr Hunt spoke after the Downing Street summit about an option for people to go to their banks or lenders and speak about their options, if they are struggling with repayments, without it having an impact on their credit rating – although this had been mentioned as early as March this year by the Financial Conduct Authority (FCA).
He said that people who change the length of their repayment term or go on to interest-only plans can reverse their decision within six months without it impacting their credit rating.
But there was no announcement of support for people who rent, who are facing landlords hiking prices or selling properties from under them due to rising mortgage costs.
The chancellor said: “There are two groups of people that we’re particularly worried about.
“The first are people who are at real risk of losing their homes because they fall behind in their mortgage payments.
“And the second are people who are having to change their mortgage because their fixed rate comes to an end and they’re worried about the impact on their family finance since the higher mortgage rates.”
Chancellor’s mortgage plan might mitigate against chaos – but it will not prevent pain
There was never going to be an announcement on Friday about direct “bailout” style funding for those struggling with their mortgages.
Both the government and Labour agree that would risk fuelling inflation further.
So what we have instead is a beefing up of existing tools available to lenders and a reintroduction of some of the easements seen during the pandemic.
The difficulty may be that the sheer depth and length of this mortgage squeeze will likely still leave many wanting more from both the banks and the government.
Similar repossession breaks were introduced during the pandemic.
An announcement several hours later included data from the FCA, showing 0.86% of residential mortgages were in arrears in the first quarter of 2023 compared with 3.32% in 2009 after the financial crash.
It added that the proportion of disposable income spent on mortgage payments is 5.4%, compared with 10% in the 1990s.
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Martin Lewis, the founder of MoneySavingExpert.com, said; “I met the chancellor on Wednesday and reiterated that the minimum we needed was to ensure that when people asked for help from lenders, they knew that if things changed, it wouldn’t be detrimental to their financial situation and their credit scores would be protected as much as possible.
“I’m pleased to see it looks like the chancellor has listened and those measures are going to be put in practice by the banks. We need to make sure everybody knows their rights if they are in trouble with their mortgage, so they can feel comfortable speaking with their lender and understand the measures that they can request for help.”
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Sir Keir Starmer, the Labour leader, said the public were looking for “actions, not words”, when it came to their mortgages.
He said there are “many mortgage holders, many families, across the country who are now even more worried about paying their mortgage”.
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Labour: ‘People want action not words’
He said: “They know that the government’s been about for 13 years, they know the government crashed the economy last year.
“What they want, I think, is a much stronger sense that the government is gripping this; action, not words.”
Elon Musk could be on track for a $1trn pay packet.
Tesla shareholders have approved the whopping financial package for the CEO – who’s already worth an estimated $491bn – if he hits a series of ambitious targets over the next 10 years.
But that $1trn figure (or £761,910,000,000) – which is both one thousand billion and one million million – is almost impossible to imagine for most people.
Even so, we have drilled down into the numbers and examined what you can do with a trillion US dollars – and it turns out, quite a lot.
Show me the money
Laid end to end, a trillion one-dollar bills would cover a distance of approximately 156 billion metres.
That could wrap around the equator 3,890 times, easily reach the sun from Earth (around 149.6 million km) or loop from Earth to the moon 405 times.
That many one-dollar notes could cover a massive area (roughly 10,339 km squared), meaning you could blanket nearly all of Lebanon or Jamaica in bills.
Spend it on sport
You could splash out on virtually all of the world’s major sporting leagues.
The clubs which make up the Premier League are relatively cheap ($30bn), and even when snapping up the UEFA Champions League clubs and the big five top divisions of Spain, Italy, Germany, and France, there’s still $858bn left in the kitty.
The four major US sports leagues for ice hockey, baseball, basketball, and American football (NFL, NBA, MLB and NHL) have a rough valuation of $544bn, according to Sportico.
But then add the IPL cricket league ($120bn) and F1 ($23.1bn) and Musk still has change from an estimated total spend of $829.7bn.
Elon Musk is in the money if he hits targets set by Tesla’s shareholders. File pic: AP
Take over Tesla’s rivals
He could buy up the top 15 largest publicly traded automakers (excluding Tesla) by market capitalisation.
They would include firms like Japan’s Toyota ($275bn), Chinese automaker BYD ($120bn), and luxury brands like Ferrari ($81bn) and Mercedes-Benz ($62bn), as well as BMW ($52bn), Volkswagen ($50bn) and Ford ($48bn).
But there would still be a little change left over; the total bill would be an eye-watering $992bn.
Buy up San Diego
He could buy up every single residential property in San Diego County – valued at a total of $1trn. Seattle is just slightly out of reach at $1.1trn, according to recent data from real estate firm Zillow.
But if he wanted to buy big – there is always Tennessee. The total value of homes in the US state is estimated at $957bn. Or there is Maryland, which at $1.01trn could be bought if he can find a little more cash behind the sofa.
Sadly, he would struggle to scoop up London’s entire housing stock, which in February was valued at just under £2trn ($2.53trn), according to agents Savills.
Cities like New York ($4.6trn) and Los Angeles ($3.9trn) are also not within his budget, hosting America’s most expensive residential markets.
Do something charitable?
There is always the possibility Musk could follow in the footsteps of Microsoft founder Bill Gates, who intends to give away 99% of his vast fortune over the next 20 years.
He could give every single man, woman, and child in the US a share of his cash pile. They would receive approximately $2,917.32 (£2,223.29), based on a population estimate of 342.7 million.
Although it would be roughly $14,348.79 (£10,935.20) for every person (roughly 69.6 million) in the UK.
If he wanted to give the entire globe an early Christmas present, then based on the rough world population estimate of 8.2 billion, everyone would receive $121.80 (£92.87).
Pay off the credit card
With $1trn, he could instantly rewrite history and erase debt interest payments and the government debt from dozens of the world’s sovereign nations.
Or Musk could wipe out the debts of Singapore ($1trn) or South Korea ($0.99trn) in one go, according to figures from the International Monetary Fund’s latest World Economic Outlook (Oct 2025).
But when it comes to the biggest debt-laden countries, $1trn would not even touch the sides.
The US has $38.3trn of government debt (just over one third of the total global debt pile) while the UK has a modest $4.1trn.
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