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Mortgage prisoners want ‘urgent answers’ on lack of alternative products

Paloma Kubiak
Written By:
Paloma Kubiak
Posted:
Updated:
28/09/2022

A mortgage prisoner campaign group has called on the city watchdog to explain why their lenders can’t offer alternative rates.

Rachel Neale, lead campaigner for campaign group UK Mortgage Prisoners, said that despite multiple requests there had been “no regulatory intervention” by the Financial Conduct Authority for people who had been paying high variable rates of 4-7% or more under Landmark, Heliodor and others for over a decade.

Neale added that mortgage prisoners had been told they are “not being treated any differently to other borrowers or unfairly”, but now interest rates could be raised to similar levels for other borrowers, the media and economists were “raising an outcry of unfairness”.

She said the “biggest upset” was that the FCA, UK Finance, Treasury and the financial industry had allowed the likes of Landmark and Heliodor to “choose not to offer new rates when they can”.

Neale said the campaign group and others had been “sold a lie for years” that the firms could not offer alternative products.

She expressed outrage that Sheldon Mills, executive director of consumers and competition at the FCA, said there would be no change to affordability criteria for those trying to move lenders.

‘A decade of suffering’

“You have allowed a decade of suffering to families who have been trapped with companies they did not choose and on rates, now considered extortionate according to the media, while even banks are removing mortgage products overnight due to not knowing where rates may end up,” Neale said.

She called on the FCA and UK Finance to explain why these entities could not provide products at fixed rates or allow customers to switch product type.

“We need urgent answers. The recent statement on the Citizens Advice super complaint on the mortgage loyalty penalty concludes no intervention is required. We cannot understand how you can stand by this particularly given that it is the most vulnerable who are trapped on Standard Variable Rates,” Neale concluded.