Ban on Evictions & Protection for Renters
The government has announced a radical package of measures to protect renters and landlords affected by coronavirus. As a result, no renter in either social or private accommodation will be forced out of their home during this difficult time.
Emergency legislation will be taken forward as an urgent priority so that landlords will not be able to start proceedings to evict tenants for at least a 3 month period. As a result of these measures, no renters in private or social accommodation needs to be concerned about the threat of eviction.
Housing Secretary Robert Jenrick MP said:
The government is clear – no renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts.
These are extraordinary times and renters and landlords alike are of course worried about paying their rent and mortgage. Which is why we are urgently introducing emergency legislation to protect tenants in social and private accommodation from an eviction process being started.
These changes will protect all renters and private landlords ensuring everyone gets the support they need at this very difficult time.
Ben Beadle, Chief Executive of the National Residential Landlords association said:
Landlord groups welcomes government support. We recognise the exceptional circumstances and we will work collaboratively with government to ensure these measures protect both landlords and tenants.
Mortgage Payment Holidays
Source: Financial Conduct Authority
We have issued new guidance on how we expect mortgage lenders and administrators to treat customers fairly during this coronavirus (Covid-19) situation. Read more about the steps we’ve taken to support you.
Applying for a payment holiday
You should contact your lender if you think you may potentially experience payment difficulties as a result of the coronavirus situation.
Your lender shouldn’t need any evidence that your income has been affected by coronavirus.
Interest on your mortgage during the payment holiday
You will still be charged interest during the payment holiday, unless your lender has told you otherwise.
When the payment holiday ends
At the end of the agreed payment holiday, you will continue to make payments. And you will need to agree with your lender a manageable way to make up the missed payments given your circumstances. Your lender will explain to you the options that they offer.
If you are still not able to make your full mortgage payments due to coronavirus, then it may offer you a further payment holiday if appropriate to your circumstances.
Your credit score
Our guidance makes clear to firms that they should ensure that taking a payment holiday will not impact your credit score.
Agreeing the payment holiday
We expect lenders to offer payment holidays to borrowers who may experience payment difficulties as a result of the coronavirus. Many lenders have already committed to this.
Your lender may also offer other options if they are more appropriate for your circumstances, and where it is in your interest.
If you are behind with your mortgage payments.
You can still have a payment holiday. You will need to discuss this with your lender. It will consider whether a payment holiday is appropriate as well as any measures that are already in place to help you through your payment difficulties.
How long do I have to apply for a mortgage holiday?
If you think you may experience payment difficulties and may need a payment holiday, you should speak to your lender in good time before the next payment is due. Please be considerate of others when contacting your lender and allow those with much closer dates into the queue first.
You can apply for a payment holiday at any time before this guidance is reviewed in 3 months. The payment holiday will not start, however, until it has been agreed with your lender.
Contacting your lender at this time
Lenders have committed to responding as quickly as possible, but due to high levels of demand and staff having to work from home, service levels might be slower than usual.
Ban on Repossessions
Source: Financial Conduct Authority
Lenders are temporarily stopping repossession actions
During this current period of unprecedented uncertainty and upheaval we do not think people should be at risk of losing their homes. We therefore expect lenders to stop repossession action. This applies to all mortgage borrowers at risk of repossession, whether or not their incomes are affected by coronavirus. Many lenders have already committed to this.
If you already have a repossession order on your home
We would not expect the lender to go ahead with the repossession, unless you want them to. Please contact it to discuss your situation.
Choosing for your home to be repossessed
You may choose for your home to be repossessed if you believe it’s in your best interest – for example, because you’ve already made plans for alternate accommodation. If this is the case, please contact your lender so that it knows this.
Interest during this period
You will continue to be charged interest on the amount you owe, plus any fees and charges you owe according to your lender’s tariff of charges.
Financial implications if repossession is stopped
The amount you owe will increase because interest will continue to be charged. This means that you are likely to get less back if and when your property is repossessed and then sold by your lender.
If property prices go down between now and the time your property is sold then you might get even less back, or nothing if your property is sold for less than you owe.
Your lender will be able to give you more information on how this affects you.
If you do not want repossession to be stopped, contact your lender immediately.
Who does this guidance apply to?
To meet the challenges coronavirus could pose to borrowers we expect all regulated mortgage lenders and administrators to comply with our guidance.
Where there are companies which are unregulated (and technically out of scope of our guidance) which make decisions that affect mortgage borrowers, given the current emergency, we expect them to adopt this guidance on a voluntary basis as an appropriate response. Many of these firms are responsible for the mortgages of individuals often known as ‘mortgage prisoners’, who could be vulnerable.
We will consider the extent to which they have adopted this guidance in assessing our regulatory approach and whether those companies, or senior individuals within those firms, are fit and proper as part of any future application for authorisation.