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Labour plans to bolster long-term fixed rate products ‒ report

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  • 15/01/2024
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Labour plans to bolster long-term fixed rate products ‒ report
Shadow chancellor Rachel Reeves (pictured) has pledged that Labour will endeavour to make long-term fixed rates a larger part of the mortgage market, a report has said.

Speaking to The Times, Reeves said that a long-term fixed rate would allow people to buy houses with smaller deposits and with lower monthly repayments.

Long-term fixed rate products would also make stress tests “redundant”, allow people to borrow more and remove volatility from mortgage payments.

In the interview, Reeves said that she had asked for a Labour review of financial services to work with the mortgage industry to address regulatory barriers and facilitate a cultural shift away from short-term fixed rates and make long-term fixed rate deals a larger part of the market.

She said that she would not want taxpayers to underwrite lenders to offer long-term fixed rates, as is done in other countries.

Reeves added that Labour would support any cuts to income tax introduced in the Spring Budget and it would not support cuts to inheritance tax and would not raise taxes beyond what has already been announced.

She ruled out wealth taxes, increases in income tax thresholds or capital gains tax.

Reeves also suggested she may row back slightly on one of its flagship pledges to invest £28bn a year into green infrastructure.

She added that it was likely that public spending would rise by one per cent overall from 2025, which could lead to cuts to certain departments.

Reeves said that she would go ahead with plans to impose VAT and business rates on private schools.

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