Milestone for mortgage prisoners: Martin Lewis says "finally something is likely to be done" after years of campaigning

The Chief Executive of the Financial Conduct Authority (FCA) has announced that it will consult on changing its lending rules to help free 140,000 ‘mortgage prisoners’. The worst affected are borrowers who are currently stuck with an inactive or unregulated lender – often paying higher mortgage rates – and are unable to switch to a cheaper deal with an alternative provider.

MoneySavingExpert.com (MSE) has been campaigning to free mortgage prisoners since 2015. Please see the notes to editors for the timeline of our work. 

Martin Lewis, founder of MoneySavingExpert.com said: “Finally, a welcome and sensible move. For over four years we’ve been saying that it’s ludicrous that people are failing affordability tests because they’re absurdly told they cannot afford a cheaper deal than the one they’re already on.

“Affordability checks are important for first-time buyers. But for those that are remortgaging to a cheaper deal – without moving house, without borrowing more and without change of circumstance – to be told that they cannot afford a cheaper deal is nonsense, and it means the tests are flawed.

“We’ve heard in the past that this is an EU regulation problem, but the EU says it’s a UK interpretation problem… frankly I don’t give a monkey’s. This has left way over 100,000 people paying far too much for their mortgage and they’re at a much higher risk of default and repossession. I am absolutely delighted that after all these years of campaigning, finally we’re hearing that something is likely to be done about it.”

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Notes to editors

MSE's mortgage prisoner campaign timeline:

• In 2015 Martin met key figures in the EU, the Treasury and the FCA, which are the organisations responsible for UK mortgage regulations. He attempted to organise a summit between them, for them to collectively work out who was responsible for the situation, and how it could be fixed.

  
  

  Unfortunately, the summit didn't take place.

• In 2016, then-Chancellor George Osborne wrote to mortgage lenders following a meeting with Martin about the plight of mortgage prisoners.

  
  

  However, Martin said the Chancellor's letter only addressed "a fraction of the problem".

• In May 2018, the FCA found 150,000 consumers in the UK were mortgage prisoners. MSE contributed to the regulator's discovery by suggesting and helping facilitate a survey of mortgage brokers. The survey backed up the regulator's findings from analysing mortgage data, and the FCA thanked MSE for its contribution.

  
  

  The regulator said it was able to help 30,000 of the mortgage prisoners it identified – whose lenders the FCA could force to help their 'imprisoned' consumers if needed. But the other 120,000 'prisoners' have had their mortgages bought by firms who aren't authorised to lend, and so the FCA has no power to make them do anything.

• In October 2018, Treasury Minister John Glen admitted that mortgage prisoners "need to be dealt with" at an event run by MoneySavingExpert.com at the Conservative Party Conference.

  
  

  The minister also expressed agreement with Martin's call that an affordability check for someone with an existing mortgage – if it's at a cheaper rate and they're not borrowing more – should be: 'have you repaid and not defaulted?'.