Research from the Association of Mortgage Intermediaries has revealed 86 per cent of brokers believe there is still a mortgage prisoner issue.
In its Mortgage Market Review follow-up study in May, the Financial Conduct Authority denied there was any obvious problems surrounding borrowers trapped in their existing deal and unable to switch.
This is often due to weak loan-to-value, prior self-certification, interest-only, self employment or having ‘credit blips’ in an otherwise good mortgage payment record.
The Ami commissioned NMG Consulting to survey 118 advisers - split roughly equally between directly authorised and appointed representatives - during July, finding a quarter felt the problem was getting worse, while the remainder felt while there was an issue, circumstances were improving.
To scale the problem, 76 per cent of brokers have less than 10 per cent of their clients who are prisoners, while 18 per cent estimated that between 10 and 20 per cent of their clients are mortgage prisoners.
Just six per cent of brokers have more than 20 per cent of their clients who cannot get a new deal.
Robert Sinclair, chief executive of the Ami, stated that despite assurances from lenders, trade bodies and the regulator, he continues to hear evidence for firms of a continuing problem.
“Whilst interest rates remain low, the issue is unlikely to surface significantly. However as soon as rates rise, we have no doubt that what is a trickling stream will become a flood and the industry will have to address matters,” he commented.
“We hope that the supervision teams at the FCA begin to take this seriously and look properly at the extent of this issue and whether all lenders are acting in the best interest of all their mortgage customers.”
peter.walker@ft.com
