Thank you for contacting me about the plight of mortgage prisoners.
I appreciate the concerns you raise. In recent years, the UK experienced a period of historically low interest rates. However, mortgage prisoners have been stuck on high standard variable rates (SVRs), with little or no ability to switch to the competitive mortgage rates available to others. As a result, mortgage prisoners have been left paying thousands of pounds more a year than they otherwise would.
The Conservatives’ chaotic leadership and disastrous mini-budget has put a lasting premium on people’s mortgages, with uncosted borrowing sending people’s mortgage rates spiralling. This has placed an even greater burden on mortgage prisoners than ever before.
I therefore believe the Government must act urgently to ensure that those who are stuck on high SVRs through no fault of their own can have access to more of the mortgage products available on the market that could make such a difference to their finances and to their lives. It was for this reason that last year, I supported an amendment to the Financial Services Bill that would have capped mortgage prisoners’ SVRs and ensured their access to fixed-rate interest deals under certain circumstances. Unfortunately, as you know, this was voted down by Government MPs and removed from the Bill, with no alternative amendment proposed. I was disappointed that the Bill was not therefore able to provide the meaningful progress on this issue that mortgage prisoners need.
In November 2021, the Financial Conduct Authority’s Mortgage Prisoner Review found that the measures introduced so far to provide switching options had had a limited effect, with only around 200 borrowers being directly helped to switch to a new deal. In response, the Government said it would look for any practical and proportionate solutions to this issue, but only after “the Treasury has had sufficient time to examine the review’s findings and consider any options available to address this complex issue”.
Mortgage prisoners need action now. Therefore, I support UK Mortgage Prisoners’ call for an amendment to the Financial Services and Markets Bill, to force all lenders to free mortgage prisoners by offering fixed rates.
Yours sincerely,
Barry Gardiner
Member of Parliament for Brent North