Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps he is taking to support people in shared appreciation mortgage schemes.

The Financial Conduct Authority (FCA) has responsibility for the conduct regulation of mortgages, including shared appreciation mortgages. The FCA sets the rules regarding the information that has to be disclosed before, during and after sale and, in addition, rules in respect of the advice that should be given to consumers.

The Government is determined that lenders should treat borrowers fairly. Any dispute arising between a lender and its customers is usually best resolved by the parties involved. However, if a shared appreciation mortgage holder believes they have been missold a shared appreciation mortgage, they are able to take their complaint to the Financial Ombudsman Service (FOS). The FOS is an independent body set up to provide arbitration in such cases.

The FOS received a number of complaints from people who purchased shared appreciation mortgages and are alert to the issues involved. However, the FOS said in its Annual Review for 2003-04 that in most cases it had not upheld the shared appreciation mortgage mis-selling complaints it had received because it had concluded that the documents were clear and the terms had been fully explained to the borrowers. Therefore, there appear to be no grounds for Government intervention in this instance.

The FOS remains willing to consider all cases on their individual merits, and any customer that has not already been in touch with the FOS may wish to contact the organisation. The FOS can be contacted by post at: Financial Ombudsman Service, Exchange Tower, London, E14 9SR, by telephone on 0800 023 4567, or through their website at www.financial-ombudsman.org.uk.