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Mortgages: Coronavirus

Treasury written question – answered on 23rd March 2020.

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Photo of John Cryer John Cryer Labour, Leyton and Wanstead

To ask the Chancellor of the Exchequer, what discussions he is having with (a) Cabinet colleagues, (b) the Bank of England and (c) representatives of mortgage companies on suspension of mortgage payments for people affected by covid-19; and whether benefits from such suspensions will be passed on to renters.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

Banks and building societies are ready and able to support consumers impacted by COVID-19. On 17 March, the Chancellor announced on behalf of the sector that banks and building societies will offer a 3-month ‘mortgage holiday’ for borrowers that are financially struggling with their repayments. This forbearance measure will enable affected borrowers to defer their mortgage payments for up to 3 months while they get back on their feet. Customers who are concerned about the current financial situation should get in touch with their lender at the earliest possible opportunity.

Lenders have also agreed to a 3 month moratorium on residential and buy-to-let possession action to start immediately to provide customers with reassurance that they will not have their homes repossessed at this difficult time.

The benefits system is ready to assist renters with their housing costs if they find their incomes disrupted by COVID-19.

Following urgent discussions with the banking industry, the mortgage payment holiday of up to 3 months announced on 17 March will be extended to landlords whose tenants are experiencing difficulty due to COVID-19.

The government has announced that to further protect renters, 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. At the end of this period, landlords and tenants will be expected to work together to establish an affordable repayment plan, taking into account the tenant’s individual circumstances.

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