Look at this graph:
People have obviously been paying down their mortgages for the last two decades, so now there are a substantial amount of people aged 50 and older, who own their homes mortage-free.
This probably means rising interest rates won't tank the economy the way it did in the 1990's because most people don't have mortgages anymore.
Interesting - does this mean the BoE can raise rates higher than countries that have a large number of mortgagees?
Yes - they have much more headroom than they did in the past.
I think the govt is worried about a property crash though. Specially due to buy-to-let mortgages.
In the last decade, mortgage lenders had to check if the borrower could afford rising rates. They should be able to cope if rates go to 3%.