Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment he has made of the effect on the economy of introducing a cap to the Standard Variable Rates charged to closed book mortgage prisoners.

The Financial Conduct Authority’s 2019 Mortgage Market Review found that direct price intervention was not required at this time as the current market is working well for the vast majority of borrowers. FCA data released in July 2020 stated that customers with inactive lenders pay on average just 0.4% more than borrowers with the same lending characteristics with active lenders. In addition, the recent London School of Economics report on mortgage prisoners noted “capping SVRs at a level close to the best rate for new loans could create harm in other parts of the market, and we do not recommend it”.