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Amendments to Financial Services Bill Proposed to Help Mortgage Prisoners

The APPG on Mortgage Prisoners, chaired by Seema Malhotra MP and Lord Sharkey and supported by senior cross party back bench MPs, have united to push for freedom for the UK’s 250,000 mortgage prisoners.

Nearly half a million people are currently suffering the consequences of being trapped for over a decade in mortgages with interest rates 2-5 times higher than high street rates.

Under three amendments tabled to the Financial Services Bill being debated in Parliament this week, mortgage prisoners held in inactive closed books such as Heliodor, Landmark, and NRAM, would benefit from immediate and life changing relief from the punitive interest rates they have been paying for over a decade.

Capping the Standard Variable Rates for closed book cases would be transformative in at last freeing mortgage prisoners, offering an instant solution for the worst cases which up to now have been ignored.

The government intervened in the entire energy market to introduce a cap which helped people across the UK, senior cross party back bench MPs are advocating for a moderate cap to operate only in closed book cases where mortgage prisoners have their hands tied with no option to change provider or product, and zero competition. This would not disrupt the RMBS market, in fact it would likely give clarity to stressed assumptions made by ratings agencies regarding interest rates charged when the lender is no longer active.

Alongside this crucial first step, the amendments would also bring vulture funds under FCA supervision and last but not least require mortgage customers to give their informed consent before their mortgage is transferred to an inactive or unregulated new lender, in a move similar to the No Consent, No Sale legislation being brought forward in Ireland.

Mortgage Prisoners are incorrectly and unfairly reported to be high risk, when in fact were those affected to be put on ‘normal’ SVRs, not only would these borrowers potentially be up to date with their payments, but their loan balances would also be around 10% lower.

The mortgages are highly sought after by vulture funds who are paying over market value for the books of these low risk borrowers who are forced to pay high interest rates. The largest group of mortgage prisoners are former customers of Northern Rock who were sold on by the government to vulture funds like Cerberus. According to the LSE report on mortgage prisoners, profit was prioritised over ordinary mortgage customers who are now trapped paying high interest rates of more than 4-5%, costing thousands of pounds a year in extra mortgage payments.

Over the past 12 years, many mortgage prisoners have paid from £20,000 to over £150,000 more than customers of active high-street lenders. Despite new criteria introduced by the FCA at the end of 2019 to help mortgage prisoners, the FCA’s

own prediction was that only 14,000 of the 250,000 mortgage prisoners may benefit using the reformed affordability test brought in towards the end of 2019.

Critically, so far nothing has been done to help the most vulnerable of mortgage prisoners, who have been put in this position through no fault of their own.

Mortgage prisoners have been failed by the institutions supposed to protect them, these three amendments will be a final silver-bullet to ensure once and for all that the thousands affected by these destructive costs will be liberated, and will ensure that this cannot happen again in the future.

NHS worker Kelly Gynn said: “I'm a mortgage prisoner and also a key worker for the NHS, I've got a mortgage which is with a closed bank only offering an SVR. This is worrying, as a lone parent money is tight. Having a capped mortgage would reduce so much stress and anxiety that the rates wouldn't increase, this would bring some security to my life and peace of mind. For almost 15 years I've had the same mortgage, sold onto inactive lenders and the rates have been increased without any questions asked from myself. Having a capped mortgage at a lower rate would reduce repayments and security to myself along with the rest of the mortgage prisoners.

Kevin and Melissa Antwhistle, key workers in a power station and NHS respectively, commented: “My wife and I have been trapped paying £780 per month on our Northern Rock Loan compared to £414 if we could remortgage. Because we borrowed more than the value of our property – something that regulators approved at the time – the regulators affordability rules say we now can’t remortgage. The rules in other words say we can’t afford to pay less. If the interest rates were capped for closed book mortgages it would literally be the end of a living nightmare and the start of a life worth living again to actually be freed from paying these ridiculously high interest rates for the last 12 long years. We simply do not deserve to be punished like this.

Rachel Neale, Lead Campaigner at UK Mortgage Prisoners said “Without disrupting the wider market, capping SVR would end eye-watering monthly costs at a time when the global pandemic has led to unprecedented strain on household finances, we must act now to free mortgage prisoners from high rates and untenable debt”.


The Financial Services Bill 2019-21 will have its report stage and third reading in the House of Commons on 13th January in the afternoon. Amendments can be found here from page 18: NC24, NC25 and NC26.

The amendments were brought forward by William Wragg MP, Sir George Howarth MP, Julian Knight MP, Tom Tugendhat MP, Andrew Selous MP, Stephen Flynn MP, Jonathan Edwards MP, John McDonnell MP, Peter Dowd MP, Rosie Cooper MP, Feryal Clark MP, Beth Winter MP, Claire Hanna MP, Stuart C McDonald MP, Alison Thewliss MP, Tonia Antioniazzi MP, Beth Winter MP, Kate Osborne MP, Tracey Crouch MP and Ben Lake MP.

LSE Report on ‘ Releasing the mortgage prisoners ’ (November 2020) by Kath Scanlon, Bob Pannell, Dr Peter Williams and Dr Andrew Longbottom with Prof Christine Whitehead, page 6 ‘How mortgage prisoners came about’ explains how government action led to the creation of mortgage prisoners.

In Ireland a No Consent, No Sale Bill passed its first three stages in the Dáil Éireann - the Bill will prevent mortgages from being sold onto vulture funds.

If you have any questions, please contact the APPG on Mortgage Prisoners:


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