In a written response to a question posed by shadow defence minister Chris Evans, Glen said that an SVR cap would “undermine the principle of risk-based pricing”. He added that the SVRs on closed books and active books were in-line.
Rachel Neale, lead campaigner for UK Mortgage Prisoners, said the comparison between the SVRs on closed books with those on the active market were not appropriate.
“The issue is those in closed books cannot access fixed rate products available in the active market, so only to compare mortgage prisoner rates with active SVRs is not appropriate. We are not in an ‘active market’ and a cap on closed books would not impact the wider market as claimed.”
Last year, UK Mortgage Prisoners said a guarantee scheme similar to that used for first-time buyers should be used if SVR caps were voted down in government.
Neale said Glen has made “empty promises” to look at other solutions since April 2021 and had come up with zero solutions in that time period, nor had he responded to those solutions suggested by UK Mortgage Prisoners and others.
She added that interest-only borrowing was “perfectly acceptable” and promoted by brokers and lenders pre-financial crisis. She said customers were often misled with promises of switching from an interest-only mortgage after a short fixed period “without any care by the lenders or brokers to have repayment vehicles in place”.
Neale noted that changes to affordability regulation were then made, meaning loans were sold off to non-lending entities.
“John Glen continues to blame the victims rather than resolve the issue which was not created by the borrowers,” she added.
Neale said: “Our members are overwhelmed by a cost-of-living crisis and interest rate rises, we live crisis within crisis after over a decade of unfair treatment.
“There is a tsunami of repossessions on the horizon with almost one million pre-crash interest-only loans maturing over the next decade. It is high time victim blaming and repeated feeble excuses were left behind by the government and replaced with action.”