MPs urge Tesco Bank to sell mortgage book to active lender

The letter was signed by 27 MPs including co-chairs Seema Malhotra and Lord John Sharkey who raised concerns about the "lack of protection for customers when their mortgages are sold on to other lenders".

In its letter, the APPG said: "We have seen the damaging impact when mortgages are sold to vulture funds or inactive lenders which hold trapped customers on high Standard Variable Rates.

"Your customers put their trust in Tesco. We hope that you will repay that trust by committing to only sell their mortgages to a fully regulated active lender which will offer them new deals and fixed interest rates."

The Group said it would like the lender to be a signatory to the UK Finance agreement enabling borrowers on a reversion rate to move to a better deal.

It also wants Tesco to continue to offer its existing customers new mortgage deals and fixed rates until the mortgage book is sold.

In addition, the APPG asked Tesco how it plans to structure the sale of the mortgage book, how quickly it intends to proceed and how it is communicating with customers about the sale.