UK Mortgage Prisoners lead campaigner Rachel Neale says the organisation looks forward to the mortgage prisoners’ issue being “reviewed with fresh eyes” after economic secretary to the treasury John Glen announced his resignation from the government earlier today.

Commenting on his resignation, Glen said while it had been a “great privilege” to serve in his role, he can “no longer reconcile [his] commitment to the role and to the financial services sector with the complete lack of confidence” in the leadership of the country. 

In light of Glen’s resignation, Neale explains UK Mortgage Prisoners is keen to have “urgent engagement with the new minister”.

 “Today we feel reinvigorated hope for UK Mortgage Prisoners with the departure of John Glen,” Neale adds. 

Earlier this week, Glen announced that the UK government will not cap the standard variable rate (SVR) charged by inactive firms in order to help the 47,000 mortgage prisoners.

The comments were made by Glen in a written statement to shadow minister Chris Evans after being asked if he plans to cap SVRs for inactive lenders to protect people who cannot move their mortgages.

Glen said putting a cap on SVRs charged by inactive firms would be “an unprecedented market intervention and would undermine the principle of risk-based pricing which underlies the mortgage market”.

He suggested that a cap would “entail risks to the financial stability of firms” which he says “would be unable to vary their rates in line with their costs of funding and would be deeply unfair to borrowers in the wider mortgage market who pay similar rates to mortgage prisoners”.

“It is worth noting that the SVRs charged by inactive firms are in line with those paid by borrowers in the active market,” he added. 

Glen also noted that the government will continue to examine what further practical and proportionate solutions exist to help mortgage prisoners which do not pose “unacceptable financial stability risks or are unfair to other borrowers in the mortgage market”.

Last year, the Financial Conduct Authority (FCA) set out the loan and borrower characteristics of the wider population of 195,000 mortgages in closed books with inactive firms.

The FCA determined that at the time there were 47,000 mortgage prisoners – those borrowers who were up to date with payments and cannot switch when it might benefit them to do so because they had loan and/or borrower characteristics that are outside their current lender appetite.

Neale comments: “The London School of Economics (LSE) report and our response to the FCA review led to us proposing solutions to Glen in the loud silence and lack of any intervention on his part 12 months after his failed April 2021 promises. He did not reply.”  

“The industry needs to help by sitting around the table with us. We have invited a solutions group but again there is little response.”

Last month, Neale sent a letter to Glen suggesting that he “refuses to acknowledge there was anything whatsoever that could have changed the outcome for mortgage prisoners in the UKAR sale” and “imply there is no issue and no detriment suffered by these borrowers as a consequence of the sale to inactive lenders and the environment of the changing market post-crash”.

Alongside other highlights, Neale says: “We are sorely disappointed that you do not grasp the urgency, the detriment nor the coming homelessness. Each time mortgage prisoners read one of your letters it is another blow to each of us who has suffered this past 14 years. There is no humanity in your responses nor any resolve to help us.”