The Brexit effect
For the best part of a decade, a chorus of people have been demanding that the government takes action to help mortgage prisoners, and the calls have been getting louder and more frequent. Last week, progress seemed to shift up a gear when the Conservative MP John Glen wrote to the chair of the Treasury select committee, Nicky Morgan, stressing that better deals shouldn’t be beyond the reach of customers who continue to pay their mortgage. As Glen highlights, the real sticking point is a piece of EU law known as the Mortgage Credit Directive (introduced in 2016). Essentially, this directive is stopping the banks from waiving affordability criteria – even for those borrowers who want to move to a new lender without increasing the size of their debt. For mortgage prisoners, this is where Brexit may actually be useful, because the UK’s departure from the EU presents an opportunity to unravel these unhelpful mortgage rules. Glen stresses that the issue is a high priority, and that the government is now “exploring legislative solutions” in order to alleviate the issues facing thousands of homeowners.