British finance minister Rachel Reeves met with the UK’s six largest banks and building societies on Thursday to evaluate the impact of the Middle East conflict on households and small businesses. The meeting follows Reeves’ earlier acknowledgement of potential economic risks to Britain from rising energy costs due to the ongoing conflict and a pledge to navigate market volatility.
The Treasury announced that Reeves secured a commitment from lenders to proactively contact approximately 1.6 million customers whose fixed-rate mortgage deals are set to expire between now and the end of the year. This initiative aims to inform customers about available options for accessing tailored support well in advance of any payment changes.
Reeves also reaffirmed the Mortgage Charter with lenders, which allows borrowers to lock in a new interest rate up to six months in advance of their current deal expiring. Borrowers can also switch deals with their existing provider without undergoing a new affordability assessment. The charter provides additional short-term relief, permitting borrowers to switch to interest-only payments for up to six months, without affecting their credit scores.
The Treasury noted that lenders have reported an increase in customers seeking guidance, but real-time data indicates that lending is stable and arrears remain low. Approximately 86% of mortgages in the UK are currently on fixed rates, providing most borrowers with insulation from immediate pressures caused by short-term market fluctuations.
