Chancellor Jeremy Hunt met with major mortgage lenders, the Financial Conduct Authority’s (FCA) chair Sheldon Mills and Money Saving Expert’s Martin Lewis last week but mortgage professionals said they would like to have seen better outcomes from the meeting. 

At the meeting, lenders agreed that they would allow customers who are up to date with payments to switch to a new competitive mortgage deal without another affordability test and provide information to help customers plan ahead when their rate ends.

They also agreed they would offer “tailored support” to those who start to struggle with payments. While this would vary by lender, it could include extending the mortgage term to lower monthly payments or accepting interest-only payments for a period.

In addition, lenders said that they would ensure “highly trained and experienced staff” are on hand to help.

Also in the meeting, the government confirmed it would take action to make Support for Mortgage Interest easier to access as well as funding for the Money and Pensions Service to provide debt advice in England.

The FCA added that it had opened a consultation on draft guidance to clarify how lenders can support borrowers with the rising cost of living and had outlined information for borrowers on options and support available.

The treasury said that mortgage lenders, the FCA and the government would “continue working closely together to ensure that the mortgage market works well for all homeowners, particularly those facing financial difficulty”.

However, speaking on this week’s Lenders Live hosted by Knowledge Bank, Atom bank head of intermediary lending – residential and commercial lending Paula Mercer said she would like to have seen “a minimum set of standards that all lenders would sign up to”. 

“I don’t think we should all assume that everybody’s got robust servicing platforms to agree on some of these solutions.”

Earlier this week, UK Finance revealed possessions and arrears figures are expected to go up. Data found that total first charge mortgages in arrears of over 2.5% of the outstanding balance are expected to rise from 80,100 to 98,500 next year and then 110,300 in 2024.

And the number of properties taken into possession, which stood at 4,100 this year, will likely rise to 7,300 next year and then 9,700 the year after that.

Mercer says: “There are more serious measures that need to be implemented here as they want lenders to start predicting more what customers need.”

She also highlights that there are currently 200,000 mortgage prisoners which are currently stuck in a closed book with inactive firms that are no longer lending. 

“That’s a big question mark that remains as they need to be supported,” she adds.

Speaking from a broker’s perspective, TA Finance founder and director Jake Cumber says: “For us, it’s more the new inquiries we’re dealing with. A couple of people mentioned possibly selling up and moving into rented accommodation simply because the rent can be cheaper in their area than the actual mortgage payment.”

He says lenders and the government getting together to look at solutions is a “very good and a positive step” however, he says a lot of things mentioned in the meeting, lenders are already doing. 

Meanwhile, Saffron Building Society head of business development Tony Hall says: “We have been taking a common-sense focused approach with people struggling to pay their mortgages for the last two years so for us it’s business as usual.”

“We’re all for this, and we have got a heavy lens on this with Consumer Duty in terms of how we ensure fair outcomes for our existing mortgage customers that might be struggling to pay or vulnerable,” Hall adds. 

Banks that attended the meeting last week included Nationwide, Virgin Money, Barclays, Santander, NatWest, Lloyd Banking Group and HSBC.

Hall says smaller lenders “don’t tend to get invited or questioned at these events because our market shares are insignificant in the context of it”.

However, he highlights that all lenders have the “same regulation and the same desire to do the right thing for our customers”.

Hodge director of business development Emma Graham says she echoes Hall’s comments. 

Graham comments: “Over the pandemic, we all worked together very robustly to do the right things for customers very quickly. It’s about copying and pasting that mindset.”

“From a smaller lenders perspective, we have been training our frontline staff for months on end now to ensure they’re well placed to support existing customers with empathy and flexibility.”