MEDIA RELEASE                                                     Wednesday, 6 November 2019

Beverley Building Society extends helping hand to mortgage prisoners

Beverley Building Society is to offer a lifeline to borrowers trapped in high-interest mortgage deals elsewhere.

The Society is responding to the Financial Conduct Authority's (FCA's) decision, earlier this year, to look at transitional arrangements in order to flex its affordability rules - introduced in 2014 - to help borrowers reduce their mortgage repayments.

Beverley Building Society will consider offering mortgages from 2.99 per cent to people looking to borrow no more than 80 per cent of their home's value, who can demonstrate a positive payment track record.

The Society's Head of Lending, Graham Carter, said: "We see no reason why we wouldn't want to extend a helping hand to so-called mortgage prisoners.

"Many of these borrowers have never missed a beat when it comes to paying their mortgage, yet they are laying out far more than they should be, which is having a devastating impact on many of their lives."

Graham explained that this step is the latest example of the Society's commitment to ‘common sense lending'.

"We're passionate about remaining true to our mutual roots, by enabling affordable homeownership for as many people as possible, and in particular those with more complex circumstances.

"We take the time to really get to know our potential borrowers' circumstances, making individual lending decisions and underwriting each case manually, rather than relying on the automated, tickbox decision-making which is so common in today's industry.

"This is how we can seek to provide solutions for mortgage prisoners wherever possible, as well as doing our best to help the self-employed, people wanting to borrow in later life, those wanting to build their own homes, and really anyone who requires a little more time, effort and consideration."

Freedom mortgage - product details at a glance

• Discounted rates from 2.99%
• £995 product fee (can be added to the loan)
• £200 valuation fee
• Free legals
• Lending subject to applicants providing evidence of income, outgoings and payment track record
• No additional borrowing allowed
• Maximum 80 per cent loan-to-value.

Notes for editors

Please note that the attached picture shows the Society's Head of Lending, Graham Carter. For more information or to arrange interviews, contact Tracy Fletcher of By Tracy Fletcher Limited PR viatracy@bytracyfletcher.comor 07983 633385.

Background information, Mortgage prisoners

This term relates to people who became trapped on their lenders' Standard Variable or reversion/default rates as a result of the introduction of the Financial Conduct Authority's new affordability rules - part of its Mortgage Market Review - in 2014

Under these rules, lenders are required to carry out a more detailed fact find about each borrower's specific circumstances, and stress test their ability to continue repaying their mortgage at a much higher potential rate

The regulator's ban on self-certification lending, where borrowers who were outside of normal criteria but confident in their ability to meet their repayments could opt out of the usual lending checks - was also a factor in leaving an estimated 150,000 people across the UK stuck on high interest rate home loans.

Of those 150,000, 10,000 are believed to be trapped with active lenders, 20,000 are former customers of failed lenders Bradford & Bingley and Northern Rock (now administered by government management company UK Finance), and the rest are included in mortgage books sold on as investments and now owned by unregulated lenders. All of these borrowers have, until now, been unable to move because they couldn't satisfy the more stringent, post-2014 affordability rules

The issue has become a focal point for lobbying activity, with both the Building Societies Association and the dedicated campaign group UK Mortgage Prisoners appealing to the Government to change the law, to encourage and enable both unregulated and active lenders to help more

In 2018, a cross-industry voluntary agreement was announced by the Building Societies Association, UK Finance and the Intermediary Mortgage Lenders Association, whereby a list of UK banks and building societies agreed to help their existing borrowers on reversion rates who are up-to-date on payments but, because of the stricter affordability criteria, were ineligible to move to an alternative product provided by their lender.

About Beverley Building Society

Beverley is the only independent building society in East Yorkshire. We have been supporting our community since 1866 and are committed to contributing to the vibrancy of our region by making a difference. 

As a true independent, we are committed to living mutuality by building better futures for our members, new and existing borrowers and savers, our people, our community and our sector at large. 

We're powered by highly committed colleagues who go over and above, every day, to offer our customers quality, friendly, personal service. 

In an age where the financial services market is moving, at pace, towards AI-powered, automated solutions, we believe there is a place for people-centred financial services and are passionate about maintaining that personal touch. 

We aim to make enough profit to ensure the Society is financially strong and sustainable, and can invest in continual product and service improvements for our members. We do not pay staff bonuses and all our profits are re-invested to support this goal.