Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will establish a hardship fund to help prevent home repossessions of people unable to switch to mortgages with lower rates.
The Government has already taken a number of measures aimed at helping people avoid repossession, including the Support for Mortgage Interest loan, which is available to help vulnerable homeowners meet their mortgage interest costs; and protection in the courts through the Pre-Action Protocol, which makes it clear that repossession must always be the last resort for lenders.
The Financial Conduct Authority (FCA) also has rules in place to protect existing borrowers who find themselves unable to remortgage. The rules prevent lenders from taking advantage of the customer’s situation, or treating them less favourably than other similar customers, including by offering less favourable interest rates or other terms.
In addition, the FCA has put in place exemptions, which allow lenders to waive affordability requirements for existing customers that are remortgaging but not increasing the size of their debt. This means that all borrowers should be able to access remortgage products at competitive rates from their existing lender.