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Mortgages and Rents: Coronavirus

Treasury written question – answered on 23rd March 2020.

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Photo of Tim Farron Tim Farron Liberal Democrat Lords Spokesperson (Communities and Local Government), Liberal Democrat Spokesperson (Housing, Communities and Local Government), Liberal Democrat Spokesperson (North of England) (Northern Powerhouse), Liberal Democrat Spokesperson (Food and Rural Affairs)

To ask the Chancellor of the Exchequer, whether he plans to instruct (a) banks and (b) landlords to provide (i) mortgage and (ii) rent holidays for (A) households and (B) businesses experiencing financial hardship during the covid-19 outbreak.

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. This will enable affected borrowers to more easily defer their mortgage payments for up to 3 months. Customers who are concerned about the current financial situation should get in touch with their lender at the earliest possible opportunity. The benefits system is ready to assist renters with their housing costs if they find their incomes disrupted by coronavirus.

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 coronavirus. Lenders have also agreed to a three-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 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 three-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.

The Chancellor also announced tax cuts of nearly £20bn for British businesses. Budget announced that eligible properties in the retail, hospitality and leisure sectors, with a rateable value of less than £51,000, would pay no business rates this year. The Chancellor’s announcement of 17 March goes further and provides those businesses an additional cash grant of up to £25,000 per business. It also extends the business rates holiday to all eligible properties in those sectors, irrespective of rateable value, so that all businesses in retail, hospitality or leisure will pay no business rates for 12 months.

Budget announced government will provide £3,000 grants to 700,000 SMEs. This grant is now increased to £10,000.

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