Economic secretary to the treasury John Glen has written a letter to UK Finance chief executive Stephen Jones regarding mortgage prisoners.

Within the letter, Glen says that “given the complexity in resolving the issues around mortgage prisoners, it is important to closely monitor the impact of the recent rule changes, including the extend and pace of action by your members.”

Glen reiterates the findings Mortgage Strategy reported on last week, which shows that 35 per cent of the 170,000 prisoners who are up-to-date with their payments are currently paying less than 3 per cent interest, and that 14,000 of these could switch products and make a “meaningful saving”.

The letter also mentions a conversation Glen says to have had with FCA chief executive Andrew Bailey, in which they discussed borrowers who are eligible under the FCA’s new affordability rules and concluded that they should have the opportunity to access cheaper deals with lenders.

Glen adds that he is “open to considering an extension to the regulatory perimeter where the benefits to consumers and markets can be demonstrated, however, it is important that we do not raise false hope for these customers by pursuing a change that does not end up helping them.”

Glen concludes: “I look forward to continuing to collaborate with industry to support borrowers whose mortgages are in closed mortgage books or owned by firms that are no regulated by the FCA.

“I am determined to enable remortgaging for those who are eligible under the FCA’s rule change, meet the criteria for lending and would benefit from doing so. The FCA rule changes lifted the regulatory barriers. I now expect lenders to take the lead in making a real difference to this group of borrowers.”

Yesterday UK Mortgage Prisoner Support Group conducted a survey through its Facebook group on mortgage prisoners, which highlighted that 146 of 170 respondents noted mental health issues relating to them being a mortgage prisoner.

Quilter managing director Gemma Harle adds: “The door to many lenders has been closed for many of those who took out a mortgage when the criteria was more straightforward, and the consequences can be substantial.

“The letter from John Glen today is a sign that the treasury has issued a three-line whip to the lending community to offer mortgages to mortgage prisoners. The FCA introduced new rules around mortgage affordability to help tens of thousands of these customers but this still requires the lenders to actually participate.

“This also applies pressure on intermediaries to offer advice to these customers, an element which is crucial. Under the FCA rules a customer is deemed as affordable if the new monthly payment is less than they are currently paying.”