Martin Lewis: Mortgage prisoners could be freed by Rishi Sunak and interest rate cap | Personal Finance | Finance
Martin Lewis is well-known for providing tips and tricks to help Britons save money, but he has also campaigned on a number of issues affecting people right across the country. Martin has highlighted the issue of mortgage prisoners with the website he founded tackling the issue since 2015. Mortgage prisoner is a term used for individuals who are unable to leave their lender due to circumstances out of their control.
This may be as a result of a lender becoming inactive or unable to authorise new products.
However, because borrowing criteria has been made stricter as a result of the financial crisis, many people could pay higher rates – and in many cases have been unable to escape.
In recent years, pressure has been placed on the Government to take action and help those in challenging financial circumstances out of their control.
The latest news as shared by Martin could be the next step in helping to free mortgage prisoners who in some circumstances have been trapped for decades.
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“Mortgage prisoners have been left paying obscene interest rates for over a decade, through no fault of their own.
“They have been completely trapped in their mortgages and unable to escape the financial misery this causes.
“Coupled with the devastating impact of the pandemic on people’s finances, the vote from the Lords is right to push for urgent action to prevent the situation from becoming catastrophic.”
Martin previously funded a report undertaken by the London School of Economics (LSE) which looked into mortgage prisoners and the difficulties they have faced.
The report argued a mere cap on Standard Variable Rates is not an appropriate or “balanced” solution in the long-term to help those trapped in older deals.
However, in lieu of anything else, Martin has said such a move could be a suitable stopgap while other solutions are explored.
For this reason, then, the decision taken in the Lords is an important one.
The news was also welcomed by campaign groups who have pushed for change in this sphere for years.
“The Lords have spoken – and so now must every constituent’s MP so that a significant tangible change to thousands of British families lives is made.
“This includes Conservative MPs who must be free to support the constituents they work for without interference and pressure from internal lobbying, which goes against our British democratic values and is at the heart of our political system and social lives.”
In 2020, the Treasury said it was committed to working with the mortgage industry to find a solution to help mortgage prisoners.
It said it would look for practical ways to address the issue.
This point has once again been echoed by Martin Lewis, who stated Chancellor Rishi Sunak promised him alternative solutions would be looked for.
Martin Lewis is the Founder and Chair of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip