Mortgages

(asked on 15th July 2020) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the effect of the modified affordability assessment on the number of mortgage prisoners unable to access new mortgages.


Answered by
John Glen Portrait
John Glen
Paymaster General and Minister for the Cabinet Office
This question was answered on 21st July 2020

The Government remains committed to supporting these borrowers, which is why the Government and the FCA have taken action to remove the regulatory barriers that previously prevented switching.

Lenders are currently making the necessary adjustments and system changes to enable them to use the modified affordability assessment for borrowers looking to re-mortgage. Due to the operational constraints caused by Covid-19 there was a temporary retraction of mortgage products in the market, therefore it would not have been of benefit to contact borrowers when meaningful options were not available to them. We expect lenders to start offering these borrowers switching options by the end of the year.

Earlier this year I wrote to UK Finance outlining my expectation that as many of its members as possible should move quickly to offer new deals to borrowers that are eligible to switch under the new FCA rules. You can read the letter here:

https://www.gov.uk/government/publications/a-letter-from-john-glen-to-stephen-jones-on-mortgage-prisoners.

The Government continues to work with the mortgage lending sector to ensure support is available for consumers.

The FCA also recently noted that firms should be reviewing their variable rates to ensure they adhere to regulations regarding the fair treatment of consumers. The full statement can be found here: https://www.fca.org.uk/news/statements/statement-mortgage-prisoners

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