Northern Rock: Mortgage 'prisoner' group hopes for Post Office boost

Rachel Neale said her group had repeatedly been promised action but had not seen results

A group representing thousands of homeowners trapped in expensive mortgages hopes the Post Office TV series will boost its campaign.

About 250,000 accounts were sold to investment firms when Northern Rock went bust in 2008.

But these firms were not licensed to offer new deals and borrowers have struggled to find offers elsewhere.

Leicestershire-based Rachel Neale, from the Mortgage Prisoners group, said the TV show echoed her experiences.

Angry customers queued outside Northern Rock branches as news of its troubles spread

One of the major events of the 2008 financial crisis in the UK was the collapse of Northern Rock bank.

The government sold off its mortgage portfolio to firms which did not operate in the same way.

Ms Neale, from Hinckley in Leicestershire, said: "The government sold our mortgages to a company that was unregulated and had no lending licence.

"We tried to switch but when we searched the market we were told we did not meet the new affordability tests because the criteria had changed.

"And because we had been sold on to a company - though they had assured the government they would have a lending licence - they never obtained that lending licence and could not offer any products."

When those customers' original deal expired, most were caught in a trap of being unable to move to a new lender but with the company they were with only able to put them on an expensive standard variable interest rate.

Ms Neale said she hears from many people who are at risk of losing their homes

Ms Neale said: "They are losing their homes, they are unable to move, they have been left on severely high interest rates.

"And they have kept up those payments but they are still told they are bad borrowers and been victimised by the government."

Joe Green, independent financial expert, said: "Lately they have been told [their rate will be] 2, 3, 4 and 5% higher which means hundreds of pounds per month more.

"Many people can't afford that so they fall into arrears or they opt to go onto an interest-only mortgage, which means their balance never comes down."

Ms Neale's family only managed to secure a new deal with a different lender two years ago.

Actor Toby Jones as postmaster Alan Bates in ITV's Mr Bates vs the Post Office

She said the attention given to ITV's Mr Bates vs the Post Office had given her renewed focus.

"When I watched the Post Office Scandal and you see the meetings that he had to go through and the promises he had made, it is exactly the same as to what I and our team have to go through.

"We are told 'things are going to change, things are going to happen' and yet 15 years later we are still sat here with absolutely no action," she said.

When the matter was raised at Prime Minister's Questions last week, Rishi Sunak promised action.

He said: "I am familiar with the situation for mortgage prisoners.

"It is something I worked on as chancellor and I know the Treasury and the current chancellor have been engaging with campaign groups and others to find ways to resolve it.

"It is not an easy situation to fix overnight but there are things that are being looked at as we speak."

A Treasury spokesman said: "We have updated mortgage lending rules removing the barrier that prevented some mortgage prisoners from being able to switch and introduced significant financial and legal protections for those most in difficulty.

"We continue to work with the Financial Conduct Authority and the sector on this issue and will carefully consider practical and proportionate solutions put forward."

A legal case involving thousands of customers against some of the finance companies is due to start this summer.

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