Help mortgage prisoners NOW, Government urged – as one year passes since Martin Lewis-funded report put forward solutions

Seema Malhotra MP and Lord Sharkey, co-chairs of the All Party Parliamentary Group (APPG) on mortgage prisoners, have today (Thursday 29 February) written to economic secretary to the Treasury Bim Afolami MP to ask when the Government will be responding to the report and to invite Mr Afolami to a meeting with the group.

Andrew Griffith MP (Mr Afolami's predecessor) confirmed in March 2023 that he would read and seek official advice on the proposals put forward in the report – but there's been "no response from the Government" since then, the APPG said.

'Mortgage prisoners are suffering – we need an urgent response'

Seema Malhotra MP said: "A year after Martin Lewis published the London School of Economics and Political Science (LSE) report with proposals to help mortgage prisoners we still have no response from the Government. Mortgage prisoners are suffering every month due to high standard variable rates... We need an urgent response."

Commenting on the APPG's calls, an HM Treasury spokesperson said: "We continue to work with the Financial Conduct Authority and the sector on this issue and will carefully consider practical and proportionate solutions put forward."

Key proposals from the LSE report

The 2023 report put forward a number of possible solutions that would help prisoners eventually remortgage with active lenders. Following the publication of the report, the Government committed to considering these proposals, which include:

• Free comprehensive financial advice for all prisoners (required for any borrower who might go on to access other solutions).

• Interest-free equity loans to clear the unsecured element of Northern Rock's 'Together' loans.

• Government equity loans on the model of Help to Buy, interest-free for the first five years.

• Fallback option: A Government guarantee for active lenders to offer prisoners new mortgages.

For more detail about the report's key findings and recommendations, see our Final mortgage prisoner report launch MSE News story. 

Who are mortgage prisoners?

Mortgage prisoners are home loan borrowers who have been trapped on high rates since the 2008 financial crisis. Many have loans that were sold by the state to 'closed book' inactive lenders – largely investment companies that are not regulated to lend new mortgages – making it difficult for them to move to cheaper rates.

Prisoners have suffered financially, mentally and physically for more than a decade. The horror of being unable to escape unaffordable mortgages has had a devastating impact on many. In the past year, near-monthly rises have seen some prisoners' rates leap from 4.5% to as much as 8.29%.