The House of Lords has voted 273 to 235 in favour of an amendment to the Financial Services Bill which imposes a cap on standard variable interest rates charged to mortgage prisoners.
The cap would apply to borrowers that are unable to switch lenders (due to changes in the amounts that they can borrow or affordability) and those with mortgages owned by an inactive or unregulated business.
The Bill will now be returned to the House of Commons with the UK Mortgage Prisoners action group urging MPs to support the proposed amendments.
Lord Sharkey, co-chair of the All-party Parliamentary Group for Mortgage Prisoners and Peers that spoke with empathy on the position have been thanked by those people who have been trapped in this position through no fault of their own by members of the action group.
The action group now has hope for the support that is needed from Conservative MPs when the Bill and amendments are voted on in the Commons. This is because no Conservative 'Lords' voted for any amendemnets with Lord True actually wanting the amendments removed.
The affordability test 'special measures' for mortgage prisoners that were announced in 2019 after a long consultation have helped just 40 mortgage prisoners so far. They are clearly not working and more needs to be done.
Time is something a mortgage prisoner has not got. We cannot expect both them and their children to carry on for yet another year in financial hardship. Now the Lords has spoken, MP’s must take the only course of action and make the change on the cap for thousands of mortgages for UK families.
That said, we are delighted that the Lords has seen the injustice that has been put on 100,000 of mortgage prisoners, at a time when successive governments have bailed out banks in the financial crisis only for their customers to become victims of the 'credit crunch' collapse. Through no fault of their own, mortgage prisoners have been left paying huge interest rates for over a decade, trapped in a higher interest rate SVR mortgage and unable to escape.
It is shocking that it has taken this long and is still not approved.