A bill introduced into parliament this week by Conservative MP Charlie Elphicke (above) that would set free 200,000 home loan ‘prisoners’ unable to re-mortgage their houses, has received its second reading and could become law.
Debated twice now as a parliamentary Ten Minute Rule Bill, it would enable homeowners caught out by recently introduced and tighter mortgage lending regulations to find better deals.
If the MP’s bill does make it to Royal Assent then it could see a sudden surge of ‘stuck’ homeowners released from the lending rules and able to move home again.
Absurd and unfair
“The new regulations say they can’t afford payments on a mortgage at say two per cent, so they are forced to continue with a mortgage paying five per cent or more. It’s plainly absurd and unfair,” he says within a blog on the Conservative Home website.
Ishaan Malhi, CEO of online platform Trussle, the UK’s first digital mortgage broker, says: “This group of people has been overlooked for too long and it’s crucial that the government step in to help by granting them an exemption from the affordability rules.
“This proposed bill will give hundreds of thousands of mortgage prisoners hope that they may soon have the ability to switch to a cheaper mortgage deal, a step in the right direction to making mortgages fairer.
“It’s worth mentioning that millions of people across the UK are currently overpaying on their mortgage because they’ve fallen onto their lender’s Standard Variable Rate.
“This is why we are campaigning for a Mortgage Switch Guarantee.”