Speaking on the “Martin Lewis Money Show” last night, Rishi Sunak promised to protect ‘mortgage prisoners’ who can’t cope with the financial strain with the on-going pandemic.
With the new Mortgage Guarantee scheme aimed to help ‘ First-Time Buyers’ get onto the property ladder , the Money Expert host, Martin Lewis urged the government to create a similar scheme to protect ‘Mortgage Prisoners’ who are stuck in plans that they can’t afford .
He brought up the question on his show last night, as he recently funded research into the issue, after hearing people have become suicidal because of the financial strain.
Mortgage prisoners are those who took a mortgage out to buy a home before 2014, and are now unable to find a more affordable deal because of rules changing following the financial crash .
However, after the rules changed there was stricter borrowing criteria, and if the consumer doesn't meet them then they are stuck overpaying . So, this means that in some instances people are unable to change from their current mortgage - even if they are up to date with payments, and the alternative mortgage is much cheaper .
On Wednesday afternoon, Rishi Sunak announced his budget, which introduces a new 95% Mortgage for First-Time Buyers, guaranteed by the Government. However, that leaves some questions unanswered by a majority of the public – why couldn’t the Government do the same with those stuck as Mortgage Prisoners?
Rishi Sunak had this to say:
I think the study said half of those are able to switch, around 125,000 but you're right, we still need to make sure that we have workable solutions for everybody and I know we are working with the LSE and others.