We need to challenge the false narrative that shifts the blame for the appalling decisions of banking executives on to the shoulders of the mortgage prisoners; law-abiding, hard-working people who were only guilty of pursuing the dream of home ownership.

According to the Mortgage Prisoners’ campaigning group, 250,000 borrowers have faced interest rates at least 1.33 per cent higher than the average market SVR (standard variable rate) reported by the Bank of England for at least a decade.

“Having taken out a market-leading UK high street mortgage before the global financial crisis in 2008, they have since found their financial mobility restricted and their ability to play their part in a healthy, functioning economy curtailed,” a report from the Mortgage Prisoners states.

“As Government has effectively ignored the issue and the FCA has intervened in a limited and ineffective manner, mortgage prisoners have had to fight tooth and nail for their freedom.

“There has been a continuous underlying theme of ‘we were to blame’ or ‘we deserve it’ because we were ‘bad borrowers’. It’s time to cap the standard variable rate for closed books to provide immediate relief to the hundreds of thousands of mortgage prisoners still suffering, 10 years on.”

Mortgage prisoners are unable to remortgage to a cheaper deal with another lender because they don’t meet strict borrowing criteria brought in after the financial crash, despite the fact they have been keeping up with repayments and would often be paying less if they switched.

Consumer champion Martin Lewis, who funded an authoritative London School of Economics report into a potential solution to the mortgage prisoners scandal, said: “While the Government chose to bail out the banks in the financial crisis, it has never bailed out the banks’ customers who were victims of that collapse.

“Mortgage prisoners have been left paying obscene interest rates for over a decade, through no fault of their own. They have been completely trapped in their mortgages and unable to escape the financial misery it causes.

“Coupled with the devastating impact of the pandemic on people’s finances, urgent action is needed to prevent the situation from becoming catastrophic,” Mr Lewis added. “The independent LSE report I funded has a cogent argument as to why an SVR (standard variable rate) cap isn’t a balanced long-term solution.

“Yet in lieu of anything else, I believe for those on closed-book mortgages it is a good stop-gap while other detailed solutions are worked up, and I’m very happy the All Party Parliamentary Group on Mortgage Prisoners is pushing it. This would provide immediate emergency relief to those most at risk.”

Mr Lewis met with Chancellor Rishi Sunak who described the LSE report as “informative”, and agreed that there was a need for a workable solutions to help all mortgage prisoners.

But what of the damaging narrative that these borrowers were always high risk? This is comprehensively rejected in the LSE report, which states: “The borrowers themselves were not to blame.

“They took out widely available mortgages with features (high LTVs, interest-only with no repayment vehicle) that were seen at the time as positive innovations enabling wider home ownership. No one who borrowed in 2005 with Northern Rock or Bradford & Bingley, both household names, could have been expected to foresee what happened to those lenders a few years later.”

The Financial Conduct Authority (FCA) declined to comment on the Mortgage Prisoners’ report. A Treasury spokesperson previously said that thousands of borrowers will find it easier to switch to an active lender or continue interest only payments thanks to rule changes by the FCA.

This response did not impress leaders of the mortgage prisoners’ group, who report that some of their members feel suicidal because of the financial strain. These victims of the banks’ incompetence are in desperate need of an emergency support package. A failure to act will leave a permanent stain on the Government’s reputation.

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