To ask the Chancellor of the Exchequer, what recent steps his Department has taken to support people at risk of having their homes repossessed.
Following the Coronavirus outbreak, the Government worked quickly with lenders and financial regulators to give people access to payment holidays on their mortgages. This gives customers a much-needed respite period, where no repayments on these products are due. The Financial Conduct Authority’s (FCA) guidance on mortgage payment holidays from 2 June also included a lender ban on repossessions until 31 October 2020, meaning that no-one will lose their home throughout this difficult period.
The FCA published further guidance on mortgage payment holidays on 14 September setting out that firms should continue to provide support through tailored forbearance options for those borrowers that are facing ongoing financial difficulties.
We have also ensured that regulations concentrate on helping people avoid repossession, including protection in the courts through the Pre-Action Protocol which makes it clear that repossession must always be the last resort for lenders.
The Government also has support in place for qualifying borrowers that cannot afford their mortgage interest. Support for Mortgage Interest (SMI) provides financial help to homeowners who qualify for an income related benefit. Claimants must be in receipt of Universal Credit for nine assessment periods (nine months), before receiving support through the SMI scheme. The loan is then repayable upon sale of the property. The primary purpose of SMI is to enable people to stay in their homes without fear of repossession.