Mortgage prisoners: Government must rectify one of great injustices of our time: Greg Wright

One 74-year-old female mortgage prisoner told me: “My life since 2007 has been horrendous. I was managing to pay interest only mortgage payments but they went up from 4 per cent to 8 per cent, which finished me off, and I have struggled ever since health and money wise. It got so bad I have had to sell my house and I am still waiting for the buyer to exchange contracts. I have found a flat to rent for a year and then God only knows where I will end up.”Another man, who became a mortgage prisoner after originally taking out an interest only mortgage for £190,000 with Northern Rock in 2006, said: “It has been completely devastating for my family, we face the prospect of being evicted from our home of 27 years. I managed to suspend a warrant of possession in April 2024 by agreeing to pay a court order of £2,695 per month to help pay off the arrears with the help of my family. I only bring in a take home pay of £2,300.”

The man is calling for moratorium on all mortgage prisoners’ repossessions until a full investigation has been carried out into a saga “which is as bad, if not worse than the Post Office scandal”.

The UK Mortgage Prisoners Action Group is demanding that the Government intervenes after it reported an influx of families losing their homes through repossessions and forced sales. The Treasury said it recognises the challenge that mortgage borrowers who are unable to switch to a new mortgage deal face, and it is working with regulators and the industry to ensure this issue is “properly considered”. The Economic Secretary to the Treasury is due to meet with the mortgage prisoners campaign group after the summer recess.

The positive tone from the Government is welcome, but time is of the essence, especially for the “prisoners” who are facing eviction.

A route to freedom is already available. A London School of Economics report, which was funded by a private donation of almost £60,000 by consumer champion Martin Lewis, provides solutions that could help prisoners remortgage with active lenders. The proposed measures include the introduction of interest-free equity loans to clear the unsecured element of Northern Rock's 'Together' loans and Government equity loans on the model of Help to Buy, which would be interest-free for the first five years. As Mr Lewis observed, the Government has a moral and financial responsibility to mitigate the harm inflicted on thousands of innocent people. It’s time to rectify one of the greatest injustices of our times.

Greg Wright is the deputy business editor of The Yorkshire Post