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Written question asked by Lord Brennan of Canton (Labour) on Monday, 3 June 2019, in the House of Commons. It was due for an answer on Thursday, 6 June 2019 (named day). It was answered by John Glen (Conservative) on Thursday, 6 June 2019 on behalf of the Treasury.

Mortgages: Interest Rates

Question

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.

Answer

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.

Secondary information

Type
Written question
Reference
259027
Session
2017-19
Subjects
Interest rates Mortgages Vulture funds
Link
View this Written question on www.parliament.uk