John Glen MP, Economic Secretary to the Treasury, has written to Rt Hon. Nicky Morgan MP, Chair of the Treasury Committee, about ‘mortgage prisoners’ following his evidence session with the Committee on 30 October.
During the session, Rushanara Ali MP, Member of the Treasury Committee, questioned the Economic Secretary about mortgage prisoners, who are those unable to remortgage or find a lower interest rate due to changes in legislation following the financial crash.
In his letter, the Economic Secretary summarised the reasons why these consumers find themselves trapped, acknowledged that “these borrowers find themselves in difficult circumstances”, and committed to continuing to explore potential solutions.
Commenting on the correspondence, Rt Hon. Nicky Morgan MP, Chair of the Treasury Committee, said:
“The Economic Secretary has acknowledged that mortgage prisoners are in a difficult and stressful situation, and the FCA has said that helping mortgage prisoners is a matter of urgency.
“Time is clearly of the essence. People are trapped repaying their mortgages on a far higher interest rate than is necessary through, as the Economic Secretary said, no fault of their own.
“Whilst the FCA has said it can help a few thousand mortgage prisoners – those with authorised lenders – this does nothing to help the 140,000 customers with inactive lenders.”
Rushanara Ali comments
Rushanara Ali MP, Member of the Treasury Committee, said:
“The Government and the FCA have found an answer for customers of active firms. They must now be bold and innovative in finding a swift solution for mortgage customers of inactive firms.
“The Committee will continue its work on this and keep a watchful eye on the Government and regulator’s actions.”