Martin Lewis urges MPs to free mortgage prisoners, warning coronavirus is set to trap even more households
Martin Lewis has called on the Government to act to help "mortgage prisoners" as he gave evidence to the Treasury Committee about the financial impact of the coronavirus pandemic, warning that more households could become trapped as a result of the crisis.
So-called mortgage prisoners are homeowners who are unable to remortgage to a cheaper deal with another lender because they don't meet strict borrowing criteria brought in after the 2008 financial crash – even though they're generally keeping up with repayments and would often be paying less if they switched.
Martin and MoneySavingExpert.com, which he founded and is the chair of, have been fighting the corner of mortgage prisoners for years, and Martin recently funded a report by the London School of Economics (LSE) putting forward practical policy solutions to help.
He explained to the Treasury Committee: "Respective governments have sold these loans to professional debt buyers that don't offer mortgages, and left these people with these types of mortgages that have been too expensive and crippled their finances and destroyed their wellbeing."
As well as reiterating his call for the Government to act - and release data that would help LSE to work out fully-costed policy solutions - Martin highlighted the danger that more "mortgage prisoners" could be created as a result of the coronavirus pandemic.
Here's a snippet of what he told the Committee (and you can also watch the full session on the Parliament website):
In addition, Martin agreed to write to the Committee detailing the information he needs the Government to release in order to calculate solutions for prisoners.
As part of the evidence session, Martin also called for:
- More support for those excluded from coronavirus support schemes
- Speedy regulation for the growing buy now, pay later market
See our Mortgages guides for full info on trying to find the best deal.
'I dread to think how many mortgage prisoners there could be in a year and a half'
Martin also explained that he is concerned there are several other factors that mean more people could be at risk of becoming trapped with their mortgage, and he warned that he wouldn't be surprised if there were four or five times as many mortgage prisoners in the UK in a year's time if action isn't taken.
This includes the high demand for home loans due to the current stamp duty holiday making it harder for those with smaller deposits to get mortgages, and those who have been excluded from coronavirus support struggling to meet their mortgage repayments. Martin also flagged that others are currently unable to remortgage due to difficulties getting cladding-related safety certificates for their homes.
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