Mortgage prisoners report 'change in tone' from Treasury as they warn families face losing homes

Many have loans that were sold by the state to “closed book” inactive lenders, which were often investment companies that are not regulated to lend new mortgages, making it difficult for them to move to cheaper rates.

Rachel Neale, lead campaigner of the UK Mortgage Prisoner Action Group, said she had welcomed the opportunity to meet Bim Afolami MP, the Economic Secretary to the Treasury, to discuss their plight.

She said: “We hopefully saw the beginnings of a change of tone from the Treasury. After six years of campaigning we met an Economic Secretary who appears to have a desire to work with us. He made a commitment to further consider proposals, and come back to us in a month.

"The need for an intervention to save families from losing their homes is a matter of urgency, as our members report daily to us the increased damage to their mental and physical health.”

The UK Mortgage Prisoner Action Group is calling for “urgent and sweeping” legislative reforms to mortgages to reduce the suffering of mortgage prisoners. A statement issued by the group said: “Each mortgage is a home, a person, a family, years of suffering. The stories are harrowing.”

Last year, the consumer champion Martin Lewis said the Government must find “any and all solutions” to free mortgage prisoners. Groups representing mortgage prisoners told MoneySavingExpert.com, which was founded by Mr Lewis, that some people have even taken their own lives.

A report, funded by a private donation by Mr Lewis, has proposed solutions to help borrowers eventually remortgage with active lenders.

Mr Lewis said last year: “People have been left in financial, physical and mental misery, exacerbated by the pandemic and cost of living crisis ripping through their already dire situations. The Government has a moral and financial responsibility to mitigate some of the damage done. Mortgage prisoners are the forgotten victims of the financial crash. The banks were bailed out at the expense of these borrowers.”

An 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. 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.”