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UK mortgage holidays extended by further three months
UK ‘mortgage holidays’ will be extended until 31 October to help homeowners struggling to pay as a result of the coronavirus crisis.
Since mortgage holidays were introduced in March in response to the virus, more than 1.8 million homeowners have taken up the option.
Now firms will be required to offer to pay a further three-month holiday for homeowners who are still struggling and those who are yet to request a holiday. The current ban on the repossession of homes will be continued to the same date.
A mortgage holiday means that homeowners will be let off paying mortgage payments for a period of time but will still have to pay the arrears built up over the course of the mortgage.
It comes as the government remains tight-lipped on a potential extension to the ban on evictions for renters.
The proposals put forward by the Financial Conduct Authority (FCA) said customers who can afford to return to full repayment should do so.
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John Glen, economic secretary to the Treasury, said that the government is doing “everything we can” to help people with their finances.
He added: “That’s why we’re working with the banks and lenders to extend payment holidays if people need them.
“Everyone’s circumstances will be different, so when homeowners can pay some or all of their mortgage, they should work with the lender on a plan. But if they are struggling, I want them to know that help is there.”
The FCA stressed that applying for a mortgage holiday would not impact credit ratings.
Christopher Woolard, interim chief executive at the FCA, said: “Our expectations are clear – anyone who continues to need help should get help from their lender.
“We expect firms to work with customers on the best options available for them, paying particular attention to the needs of their vulnerable customers, and to provide information on where to access help and advice.”
Polly Neate, chief executive of Shelter, said: “If the government lifts the eviction ban without putting in protections for renters, it will unleash a wave of homelessness that will see councils drown and families needlessly suffer.”
