Mortgage Mayhem: Separating Fact from Fiction in the UK Election

Fact-checking the claims on mortgage costs, GDP per capita, and child poverty in the UK election campaign.

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Mortgage Mayhem: Fact-Checking the Claims

As the UK heads to the polls, the Labour party has made a bold claim: that the Conservative party’s manifesto would increase the average mortgage by £4,800. But is this figure based on fact or fiction?

The Claim

Labour’s shadow chancellor, Rachel Reeves, warned that the Conservative’s plans would lead to a £4,800 increase in the average mortgage. This figure was also published in a Labour party dossier, which stated that the Conservatives’ plan would mean £4,800 more on your mortgage.

But what’s behind this number? According to Labour, the figure is based on the net cost of a large number of spending commitments and revenue raisers in the Conservative manifesto, which Labour estimates to be £71 billion. However, this calculation relies on several uncertain assumptions, including that the Conservatives’ welfare reforms will generate no savings and that all of the £71 billion would have to be borrowed, leading to higher interest rates and, consequently, higher mortgage payments.

The Reality

While Labour’s estimate may be based on some questionable assumptions, it’s not entirely unfounded. The Institute for Fiscal Studies has cast doubt on the Conservatives’ own estimate of £12 billion in savings from welfare reforms. However, it’s unclear what figure Labour used for “the average house” or whether they factored in savings from fixed-rate mortgages.

GDP Per Capita: A Mixed Bag

In the ITV seven-party debate, Reform UK leader Nigel Farage claimed that GDP per capita has declined for the last six consecutive quarters. However, according to Office for National Statistics figures, GDP per capita actually increased in the first quarter of 2024 compared to the previous quarter, although it did fall for seven consecutive quarters prior to that.

Child Poverty: A Scottish Success Story?

In the same debate, the Scottish National Party’s Stephen Flynn said that 100,000 children will be lifted out of poverty thanks to the Scottish Child Payment. While the figure likely refers to modelling that estimates 100,000 children will be kept out of relative poverty in 2024/25 due to Scottish Government policies, it’s worth noting that the Scottish Child Payment specifically will keep 60,000 children out of relative poverty in 2024/25.

Mortgage calculator

GDP per capita graph

Child poverty graph