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Martin Lewis’ mortgage prisoner research must not give ‘false hope’ – John Glen

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  • 05/03/2020
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Martin Lewis’ mortgage prisoner research must not give ‘false hope’ – John Glen
John Glen, economic secretary to the Treasury, said he hopes that Martin Lewis’s research into further solutions for mortgage prisoners did not give trapped borrowers “false hope”.

 

Last month, Lewis, the founder of Money Saving Expert, revealed he would contribute £25,000 to fund research into mortgage prisoners, and propose policy solutions to government that could release borrowers who are trapped with closed book, inactive or unregulated lenders.

In an open letter responding to Lewis’s plans, Glen wrote: “I am keen that your exercise is productive and does not simply end up raising false hope by outlining solutions that sound attractive but on closer inspection are either unworkable or unfair.”

Glen added that new proposals would only be considered if they delivered value for money for the government, not just individuals, were a fair use of taxpayer spending and addressed the issue of defining which borrowers should receive financial support over other renters and mortgage borrowers.

In a statement posted on his website reacting to Glen’s criteria for considering proposals, Lewis said he would pass on Glen’s requirements to the London School of Economics, who are carrying out the research. But he added the research would not be “constrained to its red lines”.

He said they would look for positive solutions even if the current government would not consider them.

During an evidence session in front of the Treasury Select Committee yesterday, outgoing head of the Financial Conduct Authority Andrew Bailey said the government was not “keen” to change the FCA’s regulatory perimeter to allow it to address the issue.

The FCA has approved a relaxed affordability assessment that lenders can apply to mortgage prisoners who want to switch mortgages without increasing the size of the loan.

However, analysis from the regulator indicates only up to 14,000 borrowers will meet the commercial requirements of lenders and will be helped by the new rules.

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