Martin Lewis calls for urgent help for mortgage prisoners trapped in ‘intolerable situation’ – London Wallet

Martin Lewis has once again called for urgent action to help 200,000 mortgage prisoners who are trapped paying inescapable rates.

The founder of MoneySavingExpert wants to highlight he fact that many mortgage prisoners have been trapped on high rates since the 2008 financial crisis.

A recent report commissioned by Lewis details how consecutive interest rate rises have seen some prisoners’ mortgage rates soar to as high as 8.29%, and he points out that borrowers have even taken their own lives.

Mortgage prisoners took out loans before the 2008 financial crisis – when lending rules were not as tight – with lenders that went on to fail such as Northern Rock and Bradford & Bingley.

Many of the loans were sold to firms that are not mortgage lenders and are not able to offer them cheaper products – leaving borrowers trapped on uncompetitive rates.

The London School of Economics and Political Science (LSE) third and final report – funded by Lewis – has laid out various solutions to try and help mortgage prisoners:

+ 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.

Lewis said: “I was thankful to the economic secretary to the Treasury, Andrew Griffith MP, for accepting the final report that I commissioned from the London School of Economics and Political Science into the terrible plight of mortgage prisoners, including practical costed solutions.

“But as part of that it’s really important people understand the huge life detriment that mortgage prisoners have suffered. It’s an intolerable situation that these forgotten victims of the financial crash have been living through year after year.

“Again, I am incredibly grateful that the economic secretary has said he will look into the policy solutions put forward. However, time is of the essence – the impact on people’s well-being, mental health, and in some cases whether they’re still around or not, is continuing to get worse. The Government must intervene, and it needs to be sooner rather than later.”