Asked by: Patrick Grady (Scottish National Party - Glasgow North)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect of mortgage holidays taken during the covid-19 outbreak on the credit ratings of mortgage prisoners.
Answered by John Glen
Following the Coronavirus outbreak, the Government worked quickly with lenders and financial regulators to give people access to payment holidays on their mortgages. This gives customers a much-needed respite period, where no repayments on these products are due. It was necessary to bring this temporary measure in, in order to give customers time to smooth out their finances that may have taken a hit by the pandemic.
The FCA issued guidance to all firms that engage in mortgage activities, this includes all borrowers whose mortgage is in a closed book or owned by an inactive lender.
We were clear from the start, that anyone taking a one of these payment holiday should not suffer a worsening arrears status.
Asked by: Kate Osborne (Labour - Jarrow and Gateshead East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions he has had with representatives of the mortgage lending sector on easing the financial pressures faced by people paying double interest on their mortgage during covid-19 outbreak; and what plans he has to help those people switch to new mortgage lenders.
Answered by John Glen
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:
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
Asked by: Kate Osborne (Labour - Jarrow and Gateshead East)
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
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:
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
Asked by: Kate Osborne (Labour - Jarrow and Gateshead East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions he has had with representatives of the mortgage lending sector on tackling the situation affecting mortgage prisoners.
Answered by John Glen
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:
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
Asked by: Mark Hendrick (Labour (Co-op) - Preston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent steps he has taken to mitigate the financial pressures faced by mortgage prisoners during the covid-19 lockdown; and what plans he has to enable mortgage prisoners to switch to new lenders.
Answered by John Glen
On 17 March the Chancellor announced the availability of a three-month mortgage holiday as part of an unprecedented package of support for individuals, businesses and the economy affected by Covid-19. This help was further extended on 2 June through the publication of FCA guidance. This guidance applies to all firms that engage in mortgage activities to instruct them to offer support to customers that are experiencing financial difficulty due to COVID-19.
The Government has also taken action with the FCA to support mortgage prisoners by removing the regulatory barriers that previously prevented some from switching. Lenders are currently making the necessary adjustments and system changes to enable mortgage prisoners to switch and we expect them to start offering borrowers products using the new rules soon.
Asked by: Tracey Crouch (Conservative - Chatham and Aylesford)
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 mortgage products.
Answered by John Glen
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. We expect lenders to start offering these borrowers products using the new rules soon.
I have written to Stephen Jones, Chief Executive Officer of 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:
Asked by: Tracey Crouch (Conservative - Chatham and Aylesford)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions he has had with UK Finance on its members using the modified affordability assessment for mortgage prisoners.
Answered by John Glen
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. We expect lenders to start offering these borrowers products using the new rules soon.
I have written to Stephen Jones, Chief Executive Officer of 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:
Asked by: Carla Lockhart (Democratic Unionist Party - Upper Bann)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions he has had with representatives of the mortgage lending sector on tackling the situation affecting mortgage prisoners in Northern Ireland.
Answered by John Glen
Treasury Ministers and officials have meetings with many organisations in the public and private sectors on a variety of issues, including mortgage prisoners.
A mortgage prisoner is defined by the FCA as an existing customer that may be experiencing harm because they are unable to switch to a better deal. The Government is aware that these borrowers have been in a difficult and stressful situation. That is why we have worked closely with the FCA to implement their rule change to remove the regulatory barrier that has prevented some customers from 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. We expect lenders to start offering these borrowers products using the new rules in Q2 2020.
I have written to Stephen Jones, Chief Executive Officer of UK Finance to outline 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.
Asked by: Jim Shannon (Democratic Unionist Party - Strangford)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has held discussions with representatives from the UK Mortgage Prisoners campaign group.
Answered by John Glen
I met with members of the UK Mortgage Prisoners action group on 29 January 2020 to discuss the experiences of mortgage prisoners in the UK, and the action the Government and the FCA have taken to remove the regulatory barriers that previously prevented switching and Government support for borrowers in problem debt.
Decisions concerning the pricing of loans, including the level of interest charged, remain commercial decisions for lenders, and the Government does not seek to intervene in these decisions.
Asked by: Jim Shannon (Democratic Unionist Party - Strangford)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions he has had with representatives of the banking sector on interest rates for UK mortgage prisoners.
Answered by John Glen
I met with members of the UK Mortgage Prisoners action group on 29 January 2020 to discuss the experiences of mortgage prisoners in the UK, and the action the Government and the FCA have taken to remove the regulatory barriers that previously prevented switching and Government support for borrowers in problem debt.
Decisions concerning the pricing of loans, including the level of interest charged, remain commercial decisions for lenders, and the Government does not seek to intervene in these decisions.