Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what assistance the Government provides to enable a person to remain in a home against which a bank loan for a business has been secured when they have defaulted on that loan.

UK borrowers taking out a business loan secured on their home have a number of protections available to them.

The Financial Conduct Authority (FCA) has responsibility for the regulation of mortgages secured by a first charge against a borrower’s home, regardless of the purpose of that loan. These regulations include consumer protections to ensure that repossession is only used as a last resort.

Where borrowers are taking out a second charge loan of £25,000 or less for a business purpose they are also protected under the FCA’s regulatory regime for consumer credit. The Government is currently consulting on the transfer of the regulation of second charge mortgages to the same regime as first charge mortgages.

In addition, all borrowers are provided protection in the Courts, through the use of the Mortgage Pre-Action Protocol, which requires a Court to ensure that the lender has taken all reasonable steps to resolve the borrower’s payment difficulties before granting a possession order.