Mortgage prisoners: MPs call for urgent response from Government to report which aims to help victims

Last year, a report, which was commissioned by MoneySavingExpert.com and funded by a private donation of almost £60,000 by Mr Lewis, provided costed solutions which aimed to ease the plight of Britain’s mortgage prisoners.

Mr Lewis said at the time of the report’s launch: "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.”

Seema Malhotra MP, the co-chair of the All-Party Parliamentary Group on Mortgage Prisoners (APPG) said: "A year after Martin Lewis published the LSE (London School of Economics) Report with proposals to help mortgage prisoners we still have no response from the Government. Mortgage Prisoners are suffering every month due to high Standard Variable Rates as the Government sold their mortgage on to vulture funds with no protection.

"We need an urgent response from the Government to the proposals in the LSE Report and further action to help mortgage prisoners including a requirement for mortgage prisoners to be offered fixed rates."

Ms Malhotra and Lord Sharkey, co-chairs of the APPG have written to Bim Afolami MP, the Economic Secretary to the Treasury, to ask when the Government will be responding to the LSE Report and to invite Mr Afolami to attend a meeting of the APPG to present the Government's response to the report.

The report proposed free comprehensive financial advice for all prisoners and interest-free equity loans to clear the unsecured element of Northern Rock's 'Together' loans.

The report also made the case for Government equity loans on the model of Help to Buy, which would be interest-free for the first five years.

Another key recommendation was the “fallback option” of a Government guarantee for active lenders to offer prisoners new mortgages.

The letter states that, at a meeting in April last year, the Minister heard from representatives from UK Mortgage Prisoners about the “real harm” being caused to mortgage prisoners.

It continues: “They also explained how the situation is getting worse for them every month as interest rates increase.”

A HM Treasury spokesperson said: “The Government understands the difficulties faced by borrowers who were not able to switch to a new mortgage deal.

"We have updated mortgage lending rules, removing the barrier that prevented some mortgage prisoners from being able to switch, and introduced significant financial and legal protections for those most in difficulty.

The spokesperson added: “We continue to work with the Financial Conduct Authority and the sector on this issue and will carefully consider practical and proportionate solutions put forward.”