Quilter answers FCA call for intermediaries willing to help mortgage prisoners

13 July 2020

Quilter’s Mortgage Network supports the FCA’s call for mortgage intermediaries willing to help mortgage prisoners and stands ready to help mortgage prisoners’ access more affordable mortgage options.

Members of the network have the right profile of expertise, including knowledge of equity release, to appropriately support this group and ensure they understand all their options.

A considerable number of people who took out a mortgage before the 2008 financial crisis and whose mortgage is now within a closed book or owned by an unregulated entity, cannot switch to a cheaper deal due to affordability rules introduced following the 2008 financial crisis and are trapped paying the standard variable rate.

New rules introduced by the FCA in October allow lenders to assess affordability based on a borrower’s track record of making mortgage payments, which should help around 170,000 borrowers accesses cheaper deals.

However, lenders have struggled to make the necessary changes and as they now have to deal with the fallout from Covid-19 those challenges may be even more difficult. This makes it even more important to have a financial adviser who has knowledge of the market and options available.

Gemma Harle, managing director of Quilter Financial Planning comments:

“Covid-19 has had a dramatic impact on the nation’s finances, and many will find themselves struggling to make ends meet in this challenging time. But for many mortgage holders who are trapped paying over the odds, the ramifications of the last crisis are still being felt as they are unable to switch to a better deal thanks to the affordability rules introduced in the wake of the 2008 crisis.

“What the rules are effectively saying is that these borrowers cannot afford to pay less each month. This is illogical, and Quilter is ready to support these customers throughout the entire journey, to help them find a better deal or guide them to other solutions and debt advice if necessary. 

 “But the elephant in the room remains. The FCA’s new rules will only be effective if lenders are willing to apply the new assessment and offer a product for mortgage prisoners to allow them to switch. In the current economic environment, where many high-street banks have been forced to set aside considerable amounts of capital for impairment losses, it is unlikely they will be making the changes anytime soon.

“However, all is not lost for this group. In some instances, there may be scenarios that people think they are mortgage prisoners, when in fact there are other options available.

“This group should never have been put into this position and it is unthinkable they remain in it. We will do as much as we can to support people harmed, but lenders and the regulator need to work together to help as far as they possibly can and ensure this never happens again.” 

Gail Smyth, Principle and Founder of Charles Mac, a member of Quilter’s network added:

“This is an issue close to my heart having worked closely with groups campaigning on behalf of mortgage prisoners over the past few years. Time and time again we hear devastating stories of the financial and emotional impact of being a mortgage prisoner and it is not right that this is allowed to continue.

“Advisers are well placed to do the heavy lifting for mortgage prisoners and offer potential solutions. 

“We are supportive of the FCA’s call for intermediaries to support mortgage prisoners and believe the eventual list should be compiled based on location, so that clients are working with brokers that really know their area in terms of property values and other criteria.”

For more information contact

Kathleen Gallagher
02380 726293
07990 004932

Alex Berry
02380 726260
07741 151931

Notes to Editors:

About Quilter plc:

Quilter plc is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.

Quilter plc oversees £95.3 billion in customer investments (as at 31 March 2020).

It has an adviser and customer offering spanning: financial advice; investment platforms; multi-asset investment solutions; and discretionary fund management.

The business is comprised of two segments: Advice and Wealth Management and Wealth Platforms.

Advice and Wealth Management encompasses the financial advice business, Quilter Financial Planning; the discretionary fund management business, Quilter Cheviot; and Quilter Investors, the Multi-asset investment solutions business.

Wealth Platforms includes Old Mutual Wealth UK platform and Quilter International, including AAM Advisory in Singapore.

The Old Mutual Wealth Heritage life assurance business was acquired by ReAssure Group Plc on 2 January 2020.

Since its IPO in June 2018, Quilter plc’s businesses have progressively rebranded to Quilter, as follows: 

  • Quilter Financial Planning (previously Intrinsic)
  • Quilter Private Client Advisers (previously Old Mutual Wealth Private Client Advisers)
  • Quilter Financial Advisers (previously Charles Derby Group)
  • Quilter Financial Adviser School
  • Quilter Cheviot
  • Quilter Investors
  • Old Mutual Wealth (becoming Quilter Investment Platform in 2020)
  • Quilter International (previously Old Mutual International)

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