The U.K. Financial Conduct Authority is considering changes to its responsible lending rules in an effort to help so-called mortgage prisoners who are unable to switch to a better deal.
There are an estimated 150,000 consumers who would benefit from switching, the FCA's CEO Andrew Bailey wrote in a Jan. 9 letter to the chair of the Treasury Committee Nicky Morgan.
The FCA will consult on changing the rules, with the aim to deliver a more proportionate affordability assessment by spring, Bailey said.
At present, customers can switch to a better rate only if they pass an affordability assessment and meet the lending criteria of an active lender.
Responding to Bailey's letter, Jackie Bennett, director of mortgages at U.K. Finance, said Jan. 10 that it will continue to work with members and the FCA in order to ensure that customers who want a like-for-like mortgages can switch lenders more easily.
The FCA's analysis suggests that the number of customers unable to switch under the rules consist of around 10,000 customers with active, authorized lenders, Bailey's said in his letter. In addition, there are 20,000 customers with inactive lenders that are no longer lending commercially despite being authorized for it, and 120,000 customers with unregulated firm, which are not authorized to lend, who are unable to switch and who could potentially benefit from switching.