The City Minister John Glen is calling on UK lenders to take swift action to ensure Britain’s mortgage prisoners gain access to better deals.
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In a letter to Stephen Jones, the chief executive of UK Finance, Mr Glen highlighted the work being carried out by the Financial Conduct Authority to analyse borrowers whose mortgages are in closed mortgage books or owned by firms that are not regulated by the FCA.
The letter says: “The FCA have now published this data which shows that around 170,000 of these borrowers are eligible to switch under the new FCA rules, of which there are around 14,000 mortgage prisoners who are up to date with their payments, are likely to meet commercial lending criteria and who could benefit meaningfully from switching to a cheaper deal.
“I have discussed with Andrew Bailey, the chief executive of the FCA, and he is in agreement that these eligible borrowers should have the opportunity to access cheaper deals with new lenders.
“Now that the FCA rule changes are in effect, I expect as many of your members as possible to move quickly to offer new deals to this group of eligible borrowers.”
In a reply to Mr Glen, Mr Jones said that customers of inactive lenders and firms not authorised for new mortgage lending will be contacted by their mortgage administrator later this year.
The letter added: “At that point we anticipate there will be a range of products from a variety of lenders available. Customers will need support in understanding and making their choices.
“UK Finance, together with other industry bodies, is working closely with the FCA through its Implementation Group to develop sources of information to help customers check if they are able to secure a new mortgage deal under the revised criteria and are seeking to do so quickly.”