On June 26, 2023, the UK government, under the leadership of Prime Minister Rishi Sunak, introduced a new initiative known as the Mortgage Charter. This development was the result of discussions held in December of the previous year and June with major mortgage lenders. The Charter, which has been agreed upon by lenders representing over 85% of the mortgage market, outlines a set of standards that lenders are expected to adopt when assisting their regulated residential mortgage borrowers.
The Charter was introduced in response to rising inflation and the pressures associated with households, particularly those with mortgages. The Charter’s introduction was a collaborative effort involving the UK’s largest mortgage lenders, UK Finance, the Financial Conduct Authority (FCA), and other entities such as the Building Societies Association. The FCA has set out actions it will take to support the commitments made by lenders under the Charter.
The Mortgage Charter, while a notable initiative, is one among several measures aimed at addressing the challenges in the mortgage lending sector. Its introduction has elucidated a variety of responses from stakeholders in the housing and financial sectors. As such, it presents an opportunity for a detailed examination of its implications and the ongoing debates surrounding its effectiveness.