Martin Lewis to fund large-scale research to help free 170,000 mortgage prisoners

The research is the latest step in Martin and MoneySavingExpert's long-running campaign to help homeowners trapped on expensive mortgages.

Its aim is to find evidence-based policy solutions, which will push the Government to step in and rescue the mortgage prisoners that the financial regulator can't reach.

The study will be personally funded by a donation of around £25,000 from Martin, through his charitable foundation.

What are mortgage prisoners?

'Mortgage prisoners' are homeowners who are unfairly trapped on an expensive mortgage, often with inactive lenders, who have no other mortgage products, or firms who are not authorised to offer new products.

They're unable to remortgage to a cheaper deal with another lender because they don't meet strict borrowing criteria brought in after the financial crash – even though they're keeping up with repayments and would often be paying less if they switched. Many have told us of the emotional and physical impact of this situation.

MoneySavingExpert.com has been fighting their corner since 2015, and last year the Financial Conduct Authority (FCA) announced relaxed affordability checks for new customers who meet certain criteria and want to remortgage – but while it has done everything within its authority, last month it confirmed that lenders aren't interested in helping mortgage prisoners switch with the solution it's been able to offer.

MSE has repeatedly called for the Government to take action. Last week, Treasury Minister John Glen suggested he was open to extending regulation to help mortgage prisoners – but it seems no practical steps have been taken.

What is being done to help mortgage prisoners?

MoneySavingExpert has been fighting for justice for mortgage prisoners for several years now through the route of seeking reform of regulation and laws. Here's a quick recap:

• In 2015, Martin met key figures in the EU, the Treasury and the FCA, which are the organisations responsible for UK mortgage regulations. He attempted to organise a summit between them to collectively work out who was responsible for the situation and how it could be fixed. Unfortunately, the summit didn't take place.

• In 2016, then-Chancellor George Osborne wrote to mortgage lenders following a meeting with Martin about the plight of mortgage prisoners. However, Martin said the Chancellor's letter only addressed "a fraction of the problem".

• In May 2018, the FCA found 150,000 consumers in the UK were mortgage prisoners. MSE contributed to the regulator's discovery by suggesting and helping facilitate a survey of mortgage brokers. The survey backed up the regulator's findings from analysing mortgage data, and the FCA thanked MSE for its contribution.

  The regulator said it was able to help 30,000 of the mortgage prisoners it identified, whose lenders the FCA could force to help their 'imprisoned' consumers if needed. But the other 120,000 'prisoners' have had their mortgages bought by firms who aren't authorised to lend, and so the FCA has no power to make them do anything.

• In October 2018, Treasury Minister John Glen admitted that mortgage prisoners "need to be dealt with", at an event ran by MoneySavingExpert at the Conservative Party Conference.

  The minister also expressed agreement with Martin's call that an affordability check for someone with an existing mortgage – if it's at a cheaper rate and they're not borrowing more – should be: 'Have you repaid and not defaulted?'

• In March 2019, the FCA launched a consultation detailing its solution to free mortgage prisoners. It proposed that lenders could choose to carry out a more "proportionate" affordability assessment for those who are up to date with their payments, aren't looking to borrow more and are looking for a better mortgage for their current home.

• In July 2019, MSE submitted its response to the FCA consultation, welcoming it, but calling for improvements. Crucially, MSE called on the Government to step in and help those mortgage prisoners beyond the reach of the regulator.

• In October 2019, the FCA removed some barriers that stop mortgage prisoners from finding a cheaper deal – though many will still be left trapped.

• In January 2020, FCA research found there were 250,000 people whose mortgages were with inactive or unregulated lenders. Of these, 170,000 were up to date with payments.