Asked by: Kevin Brennan (Labour - Cardiff West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent steps he has taken to enable mortgage customers who were trapped when their mortgages were sold to vulture funds to take advantage of lower interest rates; and if he will launch an inquiry.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Treasury recognises that mortgage prisoners can be in a difficult and sometimes stressful situation. However, the servicer of these mortgages must be regulated by the Financial Conduct Authority (FCA). This means that customers are protected by the FCA’s principle of Treating Customers Fairly; their Mortgage Conduct of Business rules; and customers have recourse to the Financial Ombudsman Service.
The Treasury has also worked closely with the FCA to consider how to remove the regulatory barriers that might prevent some customers from accessing better deals.
The FCA are now consulting on changes that will move the required affordability assessment from an absolute test to a relative one. This will enable lenders to more easily accept switching consumers, providing they are up-to-date with repayments and are not borrowing more.
The FCA consultation closes on 26 June 2019.
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to Mortgage customers: proposed changes to responsible lending rules and guidance CP19/14 published by the Financial Conduct Authority on 26 March 2019, what estimate his Department has made of the number of mortgage customers currently unable to switch their mortgage product who will not be able to benefit from modified affordability assessment proposals.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
HM Treasury welcome the FCA’s announcement that it intends to change its mortgage lending rules to move to a relative affordability assessment for customers seeking to switch to a cheaper mortgage without borrowing more. We have worked closely with the FCA in the lead up to the publication of their Consultation Paper.
The Economic Secretary and Andrew Bailey, the FCA’s Chief Executive, wrote to the Treasury Select Committee in response to questioning on who might be helped by the FCA’s proposed changes.
Copies of these letters can be found here:
Asked by: Seema Malhotra (Labour (Co-op) - Feltham and Heston)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what discussions he has had with the Financial Conduct Authority on the development of the cost benefit analysis used to assess the potential impact of the its proposals in Mortgage customers: proposed changes to responsible lending rules and guidance CP19/14 published on 26 March 2019.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
HM Treasury welcome the FCA’s announcement that it intends to change its mortgage lending rules to move to a relative affordability assessment for customers seeking to switch to a cheaper mortgage without borrowing more. We have worked closely with the FCA in the lead up to the publication of their Consultation Paper.
The Economic Secretary and Andrew Bailey, the FCA’s Chief Executive, wrote to the Treasury Select Committee in response to questioning on who might be helped by the FCA’s proposed changes.
Copies of these letters can be found here:
Asked by: Tim Loughton (Conservative - East Worthing and Shoreham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what support is available to borrowers seeking to access lower mortgage rates in the event that their proposed new lender or current lender is not signed up to the Government's voluntary agreement with UK Finance, the Building Socieities Association and the Intermediary Mortgage Lenders Association.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
67 lenders representing 95% of the UK’s residential mortgage market have signed up to the industry voluntary agreement to help mortgage prisoners.
As set out in my response to your PQ tabled 5th November 2018 officials in the Treasury continue to work closely with the FCA and industry to explore what more can be done. This will include where lenders are not signed up to the industry’s voluntary agreement.