UK Mortgage Prisoners
UK Mortgage Prisoners
MORTGAGE REFORM BILL
The UK Mortgage Prisoner Action Group calls for urgent and sweeping legislative reforms to mortgages to avert further homeowner crises and go some way to righting the current wrongs.
Mortgage Prisoners – trapped on predatory reversionary standard variable rates (SVRs) since Treasury rescued banks such as Northern Rock in 2008 – have experienced devastating injustice that has led to financial ruin, mental anguish, and homelessness and loss of life.
Forced to endure crippling financial strain for over a decade, while other borrowers benefited from historic low rates, and having endured soaring monthly payments, this dire situation demands immediate action to halt further sales of mortgages to non-lending entities, ensure equitable access to fixed-rate options, protect the homes of historic interest only customers safeguarding homeowners from despair and displacement. It is also time to put right years of wrong with an appropriate compensation scheme.
Our Key Demands
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This is imperative to prevent homeowners from being ensnared by SVRs—a trap that can spiral into a life-altering catastrophe, including loss of homes and life savings.
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The plight of Mortgage Prisoners, currently barred from fair rates, must be rectified. We must counter the silent epidemic of financial stress-induced mental health issues by restoring equitable lending practices.
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Residential mortgages should not be pawns in a profit-driven game. Lending reforms must stop the transfer of these mortgages to non-lending entities which leads to economic injustice and social instability.
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Transparency in mortgage ownership is non-negotiable. Borrowers must have the ability to switch rates within financial groups without opaque barriers, preventing a system that facilitates economic despair.
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The post-2008 Global Financial Crash changes to affordability criteria trap pre-GFC mortgage holders in a regulatory purgatory. A 'Grandfather Policy' must be implemented to avert a wave of homelessness, especially among the ageing population.
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A mechanism for redress is critical to address the financial haemorrhaging of those overcharged for years—a restitution for the sleepless nights and unrelenting anxiety endured.
“Government made £2.4 billion from mortgage prisoner scandal”
Wednesday 1st March 2023, representatives from UKMP were invited to speak at a Parliamentary event held at the House of Commons, hosted by the co-chair of the APPG for Mortgage Prisoners, Seema Malhotra MP.
Martin Lewis CBE, founder of Money Saving Expert presented the latest published LSE report on releasing mortgage prisoners. This is the third, and final report personally funded by Martin Lewis, and commissioned by MSE.
The new report put forward costed solutions for putting an end to the horrific situation mortgage prisoners have endured for 14 years due to government actions.
Jill Hulme (UK Mortgage Prisoner Group), Martin Lewis, (MoneySavingExpert.com founder), Rachel Neale ((UK Mortgage Prisoner Group), Seema Malhotra MP (Co-Chair of APPG on Mortgage Prisoners)
Kath Scanlon (LSE report co-writer), Jill Hulme (UK Mortgage Prisoner Group), Seema Malhotra MP (Co-Chair of APPG on Mortgage Prisoners), Martin Lewis, (MoneySavingExpert.com founder), Rachel Neale ((UK Mortgage Prisoner Group), Peter Williams (LSE report co-writer)
The report is being shared with Treasury, and the FCA. It includes indicative costings requested by the government. The Chief Secretary to the Treasury John Glen MP committed to reviewing solutions put forward in the report, telling Martin Lewis that proposals would be given “full consideration” as long as they met his three criteria: delivering value for money; fair use of taxpayer spending; and addressing risks of moral hazard.
It outlined that the Government has made £2.4bn from the sale of these loans. Not only has it made back the cost of managing the sales, the LSE report found evidence that it has generated a £2.4bn surplus. In 2009, the Government acknowledged that selling these mortgages to inactive lenders had the potential to severely harm consumers, but didn't take action to prevent this.
You can read the full report here.
Here are some statements made by key spokespeople at the event
“Seema Malhotra MP, co-chair of the All-Party Parliamentary Group on mortgage prisoners, added: "It's clear that FCA [the Financial Conduct Authority] and Government interventions to date have not worked… We do need urgent action. We do need something that will be done in the short-term as well as those medium-term interventions that can shift and try to see an end to the crisis prisoners are facing."
“Martin Lewis, who funded the report and is the founder of MoneySavingExpert, said: "This report lays out starkly that the state sold these borrowers into poverty, knowing it could cause them harm, and made billions doing it. The result has destroyed lives. People have been left in financial, physical and mental misery, exacerbated by the pandemic and cost of living crisis ripping through their already dire situations.”
Follow the link here to read the response from the Money Saving Expert website.
“Campaigner Rachel Neale, who leads the UK Mortgage Prisoners group, said: "Through our campaign work, we get hundreds of requests for help from prisoners whose stories are already devastating, living in crisis since the 2008 financial crash. But [it's] now so much worse in the current cost of living crisis. Ten consecutive rate rises later, the need for solutions is urgent. For some families it is already too late.”
Follow the link here to read the full press release from UK Mortgage Prisoners.
UK Mortgage Prisoners on reading the report were horrified, yet not surprised to read the damming evidence that the Government made a surplus of £2.4 billion in the sale of UK homeowner’s mortgages. The report also confirms the detriment caused to mortgage prisoners, that we as campaigners have long tried to bring awareness to. Mortgage prisoners, and their families have suffered financially, mentally, and physically for more than a decade. The horror of being unable to escape unaffordable mortgages has had a devastating impact on many. In the past year, 10 consecutive rate rises have seen some prisoners' rates leap from 4.5% to as much as 8.29%. The Government have been aware since 2009 of the potential to cause severe harm to the borrowers with the sale to inactive lenders but chose to take no action.
UK Mortgage Prisoners also welcomed the fact that LSE also considered a broader definition of "mortgage prisoner" than the restrictive and unrealistic one in the 2021 FCA Review. This recognises the almost 200,000 mortgage prisoners in closed books rather than the 47,000 the FCA and Government speak of. Read our response to the FCA review here.
As much as we welcome the final report and it's suggested solutions, other solutions are not excluded. Until the detail required can be explored, with input from all stakeholders, including ourselves as victim representatives, we believe it is vital to urgently introduce measures which will immediately impact the situation. As is inevitable in the time taken to put a report together the data on which it is based can shift. In this case, there has been radical shift in economic context due to one of the most turbulent periods in the mortgage industry.
We, alongside APPG Mortgage Prisoners, are calling once again for a cap on the SVR on mortgages in closed books. Mortgage Prisoners have no access to any rates other than SVRs. It is imperative that action is taken as a matter of urgency as time is something mortgage prisoners do not have.
The publishing of the report brought media coverage in the BBC News, radio and newspaper articles. We would like to thank the members of our Facebook group who volunteered to be interviewed to support highlighting the dire situation we are trapped in. Tap on the images below to read just some of the press articles.
UK Mortgage Prisoners.
UKMP are a grass roots not-for-profit organisation working towards a fairer mortgage rate for all.
250,000 homeowners have been trapped paying extortionate rates since the financial crash in 2008. The reasons that a person may find themselves a mortgage prisoner are many and varied. Regardless of the path that leads to becoming a mortgage prisoner, the end result is always the same. That individual or family are tied to their home. This can have a seriously detrimental effect on a persons prospects, finances and mental well being.
Have you found yourself trapped paying a high interest rate and been unable to remortgage?
Since the UK Mortgage Prisoners Facebook group began campaigning in 2018 increasing numbers of homeowners discovered they to were trapped in their mortgage. The most common reaction is ‘I thought I was the only one’.
UKMP are working tirelessly campaigning for a solution for freedom for all UK Mortgage Prisoners. By working together to raise our profile we can make further steps towards fairer treatment and rebuild years of damaged finances.
Follow the link button to find out more on how to get involved
What Can I Do?
For 5 years, the UK Mortgage Prisoner Action group has been relentlessly contacting MPs, Treasury, and Regulators to highlight the need for urgent change. To support this campaigning you can join the fight too!
We have prepared template letters for you to use, and edit to suit your own circumstances. Please follow the link to the see the latest letters available.
Please read the latest report from UK Mortgage Prisoners.
UK Mortgage Prisoners: Response to the FCA Review on Mortgage Prisoners, March 2022.
In November 2021 the FCA Mortgage Prisoners Review was presented to Parliament by the Economic Secretary to the Treasury, John Glen MP. This Review was announced by the Minister during the debate on the amendments proposed to the Financial Services Bill on 26th April 2021. The Review announced was to be of FCA data on mortgage prisoners, "to ensure that we have further detail on the characteristics of those borrowers who have mortgages with inactive firms and are unable to switch despite being up to date with their mortgage payments"
Mortgage Prisoner Compensation Claim
Harcus Parker act for thousands of homeowners who have mortgages with lenders which do not offer competitive mortgage products and who have been trapped paying high rates of interest on their mortgages. If they are successful, borrowers would be entitled to compensation for the excessive amount of interest they have paid. UK Mortgage Prisoner members are amongst those sat on the committee as part of the compensation claim process.
Mortgage Prisoner Stories
Read the personal stories from mortgage prisoners themselves. The lived experiences of individuals and their families over the last 12 years. The detriment it has caused financially as well as the devastating impact it has had on their physical and mental health.
Can we help?
If you are experiencing problems with your mortgage provider, are struggling to deal with their demands or are in extreme financial difficulty we may be able to help.
We can provide support and advice, introduce you to other organisations and charities or, in exceptional circumstances, provide emergency financial support from our Christine Kinsella Grant.
Keep up to date with UK Mortgage Prisoners on Twitter.
Follow @mortgageprison
Don’t forget the hashtags
#ukmortgageprisoners
#CantAffordToPayLess