Mortgages: Cerberus

Lord Naseby Excerpts

Wednesday 28th November 2018 Lords Chamber

[Lord Bates]

There is that aspect to it. I do not want to make a partisan point, but it is part of cleaning up the mess of the irresponsible lending happening in the past. These people find themselves in this situation. We and the Financial Conduct Authority are asking how we can work with the industry to come up with solutions whereby there might be greater flexibility for some people who are trapped to move to lower interest rate mortgages. At the moment, people who are on UK Asset Resolution mortgages may be paying 4% to 5%, but there are better deals, potentially, at 3% to 4%. How do they get on to them? If they have equity in their property, are up to date with their mortgage and have the income to justify it under the new rules, they can already move. It is those people who do not fall into those three categories for whom we need to work for a solution within the new European rules. That is what we are turning our attention to.

[Lord Naseby (Con)]

Does my noble friend fully understand that most of these people are, if I may use the phrase, very ordinary people? They are not experienced in financial matters in any depth, and it really is a particular problem. It is totally non-party political. It is an issue that the FCA should give greater priority to than it has done hereto. I hope not to have to stand up in a year’s time to ask this question again.

[Lord Bates]

It is a major issue. The average size of the mortgage held under UK Asset Resolution is around £120,000. People find themselves in these very difficult situations, but we are bound by the rules as they are. There will be some opportunity to offer a little bit of flexibility when the credit directive has to be onshored into UK legislation. There will be that opportunity, within tight limits, to look again at some of these aspects, and of course we will do that to the full with the FCA.