In a letter to Treasury Committee chair Nicky Morgan MP, Glen said the Government is prepared to “explore legislative solutions” to help mortgage prisoners – those who are unable to access the competitive mortgage market.
It follows Glen’s appearance before the Treasury Committee, which is a cross-party group of MPs that holds the Treasury to account, during which he was questioned about mortgage prisoners.
Glen promised to write to the committee to set out the Government’s position after this.
We’ve been campaigning for years to help mortgage prisoners and MoneySavingExpert.com founder Martin Lewis warned about the issue at MSE’s event The Mortgage Ticking Timebomb at the Conservative Party Conference last month, where both Glen and Morgan spoke.
Who are mortgage prisoners?
Mortgage prisoners are those who’ve been told they ‘can’t afford’ to remortgage, even though they are keeping up with their payments and want to switch to a CHEAPER rate.
An EU rule called the Mortgage Credit Directive means – at least in the UK’s interpretation – anyone applying for a mortgage is subject to strict affordability checks scrutinising their income and outgoings, even if they already have a mortgage and are now applying for a cheaper one.
Back in May, a report from the Financial Conduct Authority (FCA) pledged to help 30,000 of these mortgage prisoners who are with lenders that are authorised to offer mortgage products. But it also estimated that there were 120,000 more people who couldn’t get a cheaper deal than the one they’re currently on because they have a mortgage which has been sold to a firm which isn’t authorised to offer new deals.