Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans he has to cap standard variable mortgage rates for inactive lenders to protect people who cannot move their mortgages.
Data released in July 2020 stated that customers with inactive lenders pay on average just 0.4% more than borrowers with the same lending characteristics with active lenders. In addition, the recent London School of Economics report on mortgage prisoners noted “capping SVRs at a level close to the best rate for new loans could create harm in other parts of the market, and we do not recommend it”.
The government is working closely with the Financial Conduct Authority and industry to develop switching options for mortgage consumers with inactive lenders.