Mortgage prisoners are individuals who are trapped on existing deals and unable to leave current lenders due to circumstances out of their control. The problem was exacerbated in the 2008 financial crisis, when certain lenders became inactive or were not able to authorise any new products. This has led to over a decade of some mortgage payers stuck with high rates due to borrowing criteria being strengthened since the event.
Following the vote, the UK Mortgage Prisoners campaign group, which represents some of the 250,000 people estimated to be trapped in mortgage prison, released a statement.
The group said: “After a landmark vote in the House of Lords on April 19, UK Mortgage Prisoners’ members feel utterly disappointed, distressed and betrayed that the Government has failed to include Amendment Eight to the Financial Services Bill.
“This is a measure that would have provided immediate relief and significantly changed the lives of mortgage prisoners, who have faced over a decade of financial and emotional misery.
“The Commons vote marks a continued failure of Government to find immediate solutions and to put right the failure of successive Government.
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“This saw us pay for the iniquity of regulated banks in 2008, hiking our interest rates, and then selling off our homes to foreign and domestic vulture funds.”
Also under fire was the Economic Secretary to the Treasury, John Glen.
The group argued Mr Glen should have done more to help mortgage prisoners, although he did state he sympathised with their plight.
They also urged more action to help borrowers who do not have a choice in the deals they currently find themselves in.
The reasons a person finds themselves in what is known as mortgage prison can be varied.
However, it is now pushing on 12 years since many people first became palpably affected.
In the past, there have been moves to help individuals who are trapped in these high-paying deals.
Martin Lewis, Money Saving Expert, recently funded an independent report into the matter, conducted by the London School of Economics (LSE).
Indeed, there is also an All Party Parliamentary Group (APPG) which is specifically dedicated to helping mortgage prisoners and discussing solutions.
There have been warnings, though, that many mortgage prisoners face losing their homes, as individuals struggle to keep up with high payments.
This issue has only been exacerbated by the COVID-19 crisis, where many have lost their jobs or have been forced to deal with reduced income.
As a result, then the UK Mortgage Prisoners group has argued that now is the time for the Government to explore alternative support.
The group added: “This is Mr Sunak’s opportunity to step up and engage with mortgage prisoners to find meaningful solutions.
“This should also afford us a seat at the table, instead of being left on the periphery of decision that affect our lives.”
The group has requested a moratorium on mortgage prisoners who are currently facing repossession until more appropriate solutions are implemented.
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