The House of Lords has passed a Lib Dem amendment that would allow individuals trapped in unaffordable mortgages, known as ‘mortgage prisoners’, to access mortgages with much fairer rates.
Mortgage prisoners had their mortgages nationalised after the financial crash and then sold on by the Treasury to vulture funds or inactive lenders, and therefore have been stuck paying what MoneySavingExpert.com founder Martin Lewis has called “obscene interest rates”.
The amendment, tabled by Lib Dem Peer John Sharkey, would require the introduction of a cap on the rates charged to mortgage prisoners and, under specified circumstances, ensure their access to fixed rate interest deals.
Lib Dem Lords Treasury spokesperson Susan Kramer said: “So many stories from mortgage prisoners have been shared with me over the past few weeks, many of them quite frankly heartbreaking.
“The overwhelming majority of these people would not have any problem with their debt if they had been allowed to take advantage of the changes in interest rates and mortgage terms that have been available much more widely. The case to act for their protection is simply overwhelming.
“The Government have recognised that action must be taken, given the circumstances and the stress that so many people face and the corners that they have been pinned into. Such action should be taken now and not be kicked down the road yet again.”