Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if he will provide immediate financial relief to all 250,000 families in closed mortgage books.

The Government has undertaken significant work to understand the circumstances of borrowers whose mortgages are held by inactive firms, and it has worked with the FCA to create additional options for these borrowers, including through the introduction of a Modified Affordability Assessment which allows mortgage lenders to waive the normal affordability checks for borrowers with inactive firms who meet certain criteria, such as not wishing to borrow more. It is also worth reiterating that not all of the 250,000 borrowers whose mortgages are held by inactive firms are mortgage prisoners, as the FCA estimate that around half of these borrowers already meet the normal risk appetite of lenders and so could switch to an active lender.

During the recent passage of the Financial Services Act, I announced that the Treasury will work with the FCA on a review of their existing data to provide further detail on the characteristics of borrowers who have mortgages with inactive firms and are unable to switch, despite being up to date with payments. The FCA will also review the effect of its recent interventions to remove regulatory barriers to switching for mortgage prisoners and will report on this by the end of November. The Treasury will use the results of this review to establish whether there are any further possible solutions that can be found for these borrowers that are practical and proportionate.