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 - Paymaster General and Minister for the Cabinet Office
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 - Paymaster General and Minister for the Cabinet Office
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 - Paymaster General and Minister for the Cabinet Office
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 - Paymaster General and Minister for the Cabinet Office
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: Stephanie Peacock (Labour - Barnsley East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent steps his Department has taken to provide support to mortgage prisoners.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Treasury Ministers and officials have meetings with many organisations in the public and private sectors on a variety of issues. The Treasury is discussing the issue of mortgage prisoners with consumer groups, mortgage lenders, the Financial Conduct Authority and UK Finance.
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: Stephanie Peacock (Labour - Barnsley East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions he has had with representatives from the (a) Financial Conduct Authority and (b) UK Finance on mortgage prisoners.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
Treasury Ministers and officials have meetings with many organisations in the public and private sectors on a variety of issues. The Treasury is discussing the issue of mortgage prisoners with consumer groups, mortgage lenders, the Financial Conduct Authority and UK Finance.
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: Richard Holden (Conservative - North West Durham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what plans the Government has to provide further support to mortgage prisoners.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
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. We have worked closely with the FCA to implement their rule change to remove the regulatory barrier that has prevented some customers from switching.
It is expected that lenders will need approximately 6 months to make the necessary adjustments and system changes, after which they will be able to use the modified affordability assessment for borrowers looking to re-mortgage.
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: Gordon Marsden (Labour - Blackpool South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what estimate he has made of the number of existing mortgage prisoners that could benefit from the rule changes announced by the FCA on 28 October 2019.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
I am aware that customers who are unable to access cheaper mortgage deals are in a difficult and stressful situation. Taking action to remove unnecessary regulatory barriers that have prevented some customers from switching has been a priority for me and so I welcome the changes the FCA have made to their mortgage lending rules.
This change in the FCA’s rules should allow customers to switch to a new lender as long as they meet the lender’s risk appetite. This is determined by the lender and will take into account the circumstances of individual customers, which may include being up to date with their payments; not having significant other debt; and not being in negative equity.
Due to the uncertainty of lender’s risk appetites or the number of consumers who will choose to use the new switching opportunities, it is impossible to know precisely how many mortgage prisoners will be helped by the rule change until lenders are able to report progress to the Financial Conduct Authority (FCA).
Part of the FCA’s action to support mortgage prisoners is ensuring that borrowers, whose mortgage is currently held by an unregulated entity, are proactively contacted about this rule change. Inactive lenders and administrators acting for unregulated entities are now required to implement a communication strategy for relevant customers to inform them of the rule change within the next 10 months.
The FCA ran a consultation on the rule changes and thoroughly considered representations from various interested parties before implementing the changes in October. Most recently, I have met with Andrew Bailey, Chief Executive of the FCA, where we agreed to continue to collaborate and engage to support mortgage prisoners moving forward. In addition, I have met specifically with MPs for the All-Party Parliamentary Group on mortgage prisoners and numerous other MPs who, representing their constituents, have wished to discuss mortgage policy.
Asked by: Gordon Marsden (Labour - Blackpool South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps he will take to ensure that his officials contact existing vulture funds operating in the UK to ensure compliance with the new FCA regulations on mortgage prisoners.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
I am aware that customers who are unable to access cheaper mortgage deals are in a difficult and stressful situation. Taking action to remove unnecessary regulatory barriers that have prevented some customers from switching has been a priority for me and so I welcome the changes the FCA have made to their mortgage lending rules.
This change in the FCA’s rules should allow customers to switch to a new lender as long as they meet the lender’s risk appetite. This is determined by the lender and will take into account the circumstances of individual customers, which may include being up to date with their payments; not having significant other debt; and not being in negative equity.
Due to the uncertainty of lender’s risk appetites or the number of consumers who will choose to use the new switching opportunities, it is impossible to know precisely how many mortgage prisoners will be helped by the rule change until lenders are able to report progress to the Financial Conduct Authority (FCA).
Part of the FCA’s action to support mortgage prisoners is ensuring that borrowers, whose mortgage is currently held by an unregulated entity, are proactively contacted about this rule change. Inactive lenders and administrators acting for unregulated entities are now required to implement a communication strategy for relevant customers to inform them of the rule change within the next 10 months.
The FCA ran a consultation on the rule changes and thoroughly considered representations from various interested parties before implementing the changes in October. Most recently, I have met with Andrew Bailey, Chief Executive of the FCA, where we agreed to continue to collaborate and engage to support mortgage prisoners moving forward. In addition, I have met specifically with MPs for the All-Party Parliamentary Group on mortgage prisoners and numerous other MPs who, representing their constituents, have wished to discuss mortgage policy.
Asked by: Gordon Marsden (Labour - Blackpool South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions he has had with representatives of groups acting on behalf of mortgage prisoners on the effect of the announcement made by the FCA on 28 October 2019.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
I am aware that customers who are unable to access cheaper mortgage deals are in a difficult and stressful situation. Taking action to remove unnecessary regulatory barriers that have prevented some customers from switching has been a priority for me and so I welcome the changes the FCA have made to their mortgage lending rules.
This change in the FCA’s rules should allow customers to switch to a new lender as long as they meet the lender’s risk appetite. This is determined by the lender and will take into account the circumstances of individual customers, which may include being up to date with their payments; not having significant other debt; and not being in negative equity.
Due to the uncertainty of lender’s risk appetites or the number of consumers who will choose to use the new switching opportunities, it is impossible to know precisely how many mortgage prisoners will be helped by the rule change until lenders are able to report progress to the Financial Conduct Authority (FCA).
Part of the FCA’s action to support mortgage prisoners is ensuring that borrowers, whose mortgage is currently held by an unregulated entity, are proactively contacted about this rule change. Inactive lenders and administrators acting for unregulated entities are now required to implement a communication strategy for relevant customers to inform them of the rule change within the next 10 months.
The FCA ran a consultation on the rule changes and thoroughly considered representations from various interested parties before implementing the changes in October. Most recently, I have met with Andrew Bailey, Chief Executive of the FCA, where we agreed to continue to collaborate and engage to support mortgage prisoners moving forward. In addition, I have met specifically with MPs for the All-Party Parliamentary Group on mortgage prisoners and numerous other MPs who, representing their constituents, have wished to discuss mortgage policy.