Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether his Department is taking steps to help support people who (a) took out mortgages before 2008 and are unable to switch to cheaper mortgage deals and (b) are likely to have high interest rates on their new mortgage deals.

The Government has worked with the Financial Conduct Authority (FCA) to implement changes to its mortgage lending rules, removing the regulatory barrier that prevented some customers, who otherwise may have been able to switch, from accessing new products.

Ultimately, the pricing of mortgages is a commercial decision for lenders, and the Government cannot force lenders to lend to borrowers that sit outside of their risk appetite. While we remain open to practical and proportionate solutions to help those who may be unable to switch to new mortgage deals, any further work on this issue must consider their effects on the wider mortgage market, including the resilience of firms and fairness to other borrowers.

If mortgage borrowers do fall into financial difficulty, FCA guidance requires firms to provide support through tailored forbearance options. In December, the Chancellor held a roundtable with the major mortgage lenders, the FCA and Martin Lewis to discuss support for vulnerable mortgage borrowers. In this meeting, attendees confirmed the support lenders will provide and the steps borrowers should take to help those who are struggling return to a position where their mortgage is affordable and sustainable over the long term. The Chancellor also made clear his expectation that every lender live up to their responsibilities and support any mortgage borrowers who are finding it tough right now.

The Government has also taken a number of measures aimed at helping people to avoid repossession, including Support for Mortgage Interest loans for those in receipt of an income-related benefit, and protection in the courts through the Pre-Action Protocol, which makes clear that repossession must always be the last resort for lenders.

More broadly, the Government has taken decisive action to support households across the UK through the cost-of-living challenges ahead, whilst remaining fiscally responsible. In addition to the £37 billion of support for the cost of living already announced for 2022-23, the Government has announced further support for next financial year designed to target the most vulnerable households. This cost-of-living support is worth £26 billion in 2023-24, in addition to benefits uprating, which is worth £11 billion to working age households and people with disabilities. The Government is also continuing to provide support to all households through the Energy Price Guarantee, which will save the average UK household £500 in 2023-24.