Treasury select committee member Andy Love has written to Treasury economic secretary Andrea Leadsom restating his calls to make it mandatory to discuss protection when taking out a mortgage, saying he was “disappointed” with her first response.
In a Westminster Hall debate last month, Love called for loan protection to be discussed as part of the mortgage market review and for the Government to launch a review to gauge the extent of the protection gap and look at ways of closing it.
On 20 May, Treasury economic secretary Andrea Leadsom wrote to Love saying she would be cautious about giving loan protection prevalence in the regulations but did not mention the review.
Leadsom’s letter said: “Overall I am not convinced that there is a compelling case for this type of product being given particular support through regulations. I agree there is a place for loan protection products and that we need to consider ways to support the growth of a responsible market is such products.”
But in a letter to Leadsom, sent this week and seen by Money Marketing, Love says: “I was disappointed in your response to my enquiry during the debate regarding making it mandatory under the MMR to have an end dialogue regarding protection between the customer and the lending institution. This was meant to cover protection in all its forms and not specifically loan protection.
“I do not feel that [the request for a review and my call for protection to be raised as part of the MMR], which in my view are vital to the debate, were adequately addressed.”
Love says he was reassured by Leadsom signing off her letter with a handwritten note promising to “keep a close eye on the issue’, but he has asked to be kept informed of any progress.
He argues around 80 per cent of mortgages are sold without protection and that this gap must be addressed before rate rises or changes in personal circumstance mean people begin struggling to meet payments.