Consumer finance champion Martin Lewis has criticised the government, and the financial sector, for not taking action sooner to protect mortgage-payers from rising interest rates.
In a post on Twitter, Lewis explains that he warned last autumn of a “mortgage ticking time bomb” as people’s existing fixed-rate deals came to an end.
Lewis says, a mortgage summit called last December by chancellor Jeremy Hunt proved to only be “a missed opportunity talking shop…”
Lewis says he pushed for “easy to agree forbearance and help measures” to assist those facing higher mortgage costs,
But, Lewis says, his push for real changes met push back from the banks, and sometimes from the FCA, the City regulator, too.
He writes: “For example 1. Any help options should be easily reversible on request. Eg if you extend your term, to reduce payments, when things improve you should have an automatic right to reduce the term. Knowing there is a reversibility option gets rid of a barrier to action – without reversibility people are scared to be locked into a longer mortgage (which means more interest).
“2. It should have no or minimal impact on people’s credit scores (as it did in the pandemic). Again negative credit file impact is a big barrier to action – as it leaves people reticent to make a decision, which can lead to snowballing problems.
“None of the suggestions have seen any real fruition. The attention faded, especially when rates didn’t rise as sharply as first expected.”