The UK Mortgage Prisoners Action Group has called for “urgent action” from the new Labour government to support those trapped on higher mortgage rates.
The group emphasised there is a need for support among many mortgage prisoners as they are trapped on high SVRs and have fallen into arrears as a consequence of 14n consecutive rate rises.
As a result, the group argued that the new government has an opportunity to stop the “ongoing harm” and to reset borrowers’ relationships with the mortgage market.
While the group argued there is a need for a full public inquiry, it added that this is not the priority today.
“Today we need to stop the haemorrhaging of money and homes. We need immediate action,” the group stated.
In the short term, the group called for the protection of borrowers and to keep them in their homes.
It argued this could be achieved by immediately halting repossession actions due to arrears for mortgage prisoners trapped on SVRs or in closed books, and for pre 2008 interest only borrowers at term end, for an initial period of 6 months.
This pause would allow for time to work through solutions with the new government.
Thereafter, the group argued that the government should take additional long term steps such as reviewing whether SVRs are compatible with the new consumer duty and reviewing the Financial Conduct Authority’s mortgage prisoner definition.
It also stated that the government should help facilitate the transfer of mortgages to active lenders at a discount that reflects the tens of thousands of pounds of overpayments mortgage prisoners have overpaid in the years since 2008.
The group concluded by arguing the government has a “moral obligation” to set the issue of mortgage prisoners straight and to “ease the suffering” they have endured.
“All we are asking for now is for the current government to review and implement action started by the previous Labour government with an eye to the current resultant outcome,” the group said.
“We have endured 16 years of inaction and obfuscation, and it is time to end the pain.”
tom.dunstan@ft.com
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