Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what steps the Government is taking to assist those mortgage holders who are seeking to switch to mortgage providers which offer better repayment terms.

The government is committed to increasing competition in banking and creating an environment in which firms compete to offer a range of products that suit the varying needs of their customers. Both existing and prospective mortgage borrowers may benefit from shopping around to find the best deal available to them.

The Chancellor has not discussed with the Financial Conduct Authority (FCA) what effect its regulations on mortgage affordability assessments have had on the ability of borrowers to switch providers. Similarly the government has not undertaken a formal analysis of these effects.

Although the Treasury sets the legal framework for the regulation of financial services, specific rules are a matter for the FCA whose day-to-day operations are independent from government control and influence.

In May 2016 the FCA published a review which assessed the impact of recent changes to the regulation of mortgage lending. Where lending is affordable, the FCA did not see evidence that the responsible lending rules have prevented creditworthy consumers obtaining loans.

The full review can be found here: https://www.fca.org.uk/publication/thematic-reviews/tr16-04.pdf

According to data from the Bank of England, in September 2016 the average interest rate on outstanding mortgages fell to a historic low of 2.74%.