Mortgage brokers are adamant there continues to be a problem with mortgage prisoners who find themselves unable to remortgage despite claims by the FCA to the contrary.
Earlier this year, the FCA said it saw no problem with mortgage prisoners as part of its responsible lending thematic review.
But research carried out by NMG Consulting on behalf of the Association of Mortgage Intermediaries suggests 86 per cent of brokers believe there is still a mortgage prisoner issue.
Of those, a quarter felt the problem was getting worse while the rest say the problem is improving.
Of the brokers surveyed, 76 per cent said fewer than 10 per cent of their clients were mortgage prisoners, while 18 per cent say this category made up between 10 and 20 per cent of their book.
Six per cent of brokers have more than 20 per cent of their clients who are unable to remortgage onto a better deal.
Ami chief executive Robert Sinclair says: “Despite the assurances from lenders, lender trade bodies and our regulator, we continue to hear evidence for our 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.”
Sinclair says the “mortgage prisoner” label includes a range of issues including weak loan-to-values, prior self certification, interest-only, self employed and those with credit blips but a good mortgage payment record.
He adds: “We hope the supervision teams at 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.”