Which? chief executive Peter Vicary-Smith said:
“Proposals for banks to conduct an affordability test will hopefully prevent a return to the irresponsible lending of the past. But it’s disgraceful that banks encouraged so many people to borrow more than they could afford without proper checks. The banks have a responsibility to help these people who are now struggling through no fault of their own.
“The housing market is failing not just one but two generations of consumers, with many mortgage prisoners trapped with their current lender and young people excluded from the housing market altogether.
“Transitional rules to protect mortgage prisoners are a good start but the regulator needs to go much further to make sure banks are fair to hard pressed borrowers trapped on Standard Variable Rates and exposed to rising mortgage payments. More than 1.6 million people have been hit by increasing SVRs despite the Bank of England base rate remaining unchanged for more than three years. The banks must pass on lower borrowing costs from the Government’s Funding for Lending Scheme.”