Calls to extend the ban on home repossessions come after a third national lockdown was introduced earlier this month.

Home repossessions are set to be put on hold until April following the introduction of new lockdown measures across the UK.

Regulator the Financial Conduct Authority (FCA) has proposed lenders should not act on repossession orders and take back people’s homes until at least 1 April.

The moratorium on repossessions would apply to both homeowners and landlords of buy-to-let properties.

While the proposal has been put out to consultation until 18 January, it has already received the support of trade body UK Finance, which represents mortgage lenders.

Eric Leenders, managing director of personal finance at UK Finance, said: “The banking and finance industry is committed to providing ongoing support to those facing financial difficulty as a result of the pandemic.

“The industry is fully supportive of a moratorium on possessions remaining in place until 1 April 2021 to ensure customers do not lose their home at this difficult time.”

Why is this happening?

The FCA had previously called for lenders not to enforce repossession orders before 31 January, except in exceptional circumstances. 

It is proposing extending this guidance until 1 April due to the worsening coronavirus situation in the UK and the government’s new lockdown measures.

It said the latter meant people could experience significant harm if they were forced to move because their home was repossessed.

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What support is available?

Mortgage lenders have introduced a range of support measures to help homeowners and landlords whose finances have been impacted by the pandemic.

The option of taking a mortgage payment holiday, under which people can defer making their monthly repayments for up to six months, has been extended until 31 July, although consumers will have to apply by 31 January if they want a full six-month deferral.

For borrowers who have already taken a six-month payment holiday, lenders are offering tailored support, including accepting reduced payments for a period of time, switching them to an interest-only mortgage or extending their mortgage term.

More than 2.7 million mortgage payment holidays have been arranged since the scheme was first launched last March, with around 127,000 deferrals in place in mid-November 2020.

What should I do if I can’t pay my mortgage?

If you are struggling to keep up with your mortgage payments it is important to contact your lender as soon as possible, as you will have fewer options if you are already in arrears.

If you want to take out a mortgage payment holiday, follow the instructions on your lender’s website, as many lenders have set up an online application process.

If you want to request a different option, such as switching to an interest-only mortgage, you should contact your lender directly.

What’s the background?

The proposal to put repossessions on hold until April follows a similar move to ban tenant evictions until at least 21 February 2021 in England, and 31 March in Scotland and Wales.

The only exception to the ban is for evictions due to anti-social behaviour, illegal occupation, fraud or rent arrears.

Landlords are also required to give their tenants a six-month notice period if they want to evict them until at least 31 March.

Top three takeaways

  • Repossessions are set to be put on hold until April following the introduction of new lockdown measures across the UK
  • While the proposal from the FCA has been put out to consultation until 18 January, it has already received the support of trade body UK Finance
  • The moratorium on repossessions would apply to both homeowners and landlords of buy-to-let properties

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