Labour has criticised the government’s decision to exclude buy-to-let (BTL) landlords from the recently announced mortgage charter, warning that this could inadvertently lead to an increase in rents.

The new mortgage charter, unveiled by the Chancellor this week, has been designed to establish a set of universal standards to help borrowers feeling the squeeze of soaring interest rates. Under the charter, homeowners will not be forced to leave their homes without their consent for at least a year after their first missed payment. Additionally, those nearing the end of a fixed-rate deal will be given the option to secure a new deal up to six months in advance, effective from 10th July.

However, during a House of Commons debate on mortgage and rental costs, Shadow Chancellor Rachel Reeves pointed out the potential repercussions of excluding BTL mortgages from this agreement.

She said: “Treasury Ministers remain ignorant or indifferent to the plight of renters. The Tory mortgage bombshell is experienced whether people have a mortgage or not. Renters are seeing huge increases in their rents – on average 10% in the last year. Renters right now are exposed to their landlords passing the higher costs of their mortgages on to their tenants.”

Reeves’ sentiment was echoed by many of her Labour peers, including Derek Twigg MP, who reported an uptick in constituents contacting him about landlords being forced to sell their properties due to an inability to manage their own mortgage costs.

In response, Chief Secretary to the Treasury, John Glen, indicated that the charter would be gradually encompassing more lenders. He said: “I hope that more and more lenders will be added to those 85% of providers. The details will be known in the next few weeks.”