The recent upheaval created by the COVID-19 world pandemic is unprecedented, in the western world at least, in modern times. Almost the entire world economy has ground to a halt, with government requests to stay at home and wait out the upcoming wave of new infections. This is all well and good, but most of us have mortgages and other bills to pay. What can we do now?
For owner-occupiers with a personal mortgage, the good news is that the UK Chancellor of the Exchequer, Rishi Sunak, has set out government policy which will allow banks to grant 3-month mortgage payment holidays to those that need them. The payments will roll-up onto the capital owed and interest will be charged on this balance in the usual manner.
Initially, buy-to-let borrowers were excluded from this policy, but they too are now covered. The government is suggesting that individual borrowers should contact their mortgage lender to try and work out a way forward. In the meantime, no tenant may be evicted during the crisis and landlords may ask their lender for a 3-month mortgage holiday.
Business tenants are also protected against foreclosure proceedings until at least 30 June 2020. This backstop date might be moved back in time.
Whether you are an owner-occupier or a private landlord, the most important thing is not to panic or put your head in the sand. If your tenant stops paying rent, start a dialogue. Make sure they are aware of all the assistance they can expect from the government both in terms of housing costs and other income.
Many workers that are at home should be paid 80% of their income up to £2,500 PCM under the government’s furlough scheme. This has now been extended to the self-employed and freelancers, as long as they have previous accounts to validate their average past income.
Help is also offered in the form of council tax rebates and possibly even help with paying rent. The most important thing is to make sure your tenants are making claims now, as they are rarely able to backdate claims.
In most cases, the government seem keen to make sure that missed mortgage payments, when agreed with the lender, will not damage your credit history. And the good news is that with interest rates now at an all-time low, borrowing remains cheap!
For more information, contact Mortgage Required on 01628 507477 or see the Government website.
Related articles:
Analysts are predicting further rate cuts this year, with the next one possibly coming down to 4% when the Bank of England’s Monetary Policy Committee meet on Thursday 7th August 2025.
The Financial Conduct Authority (FCA) has shared new changes to mortgage rules with the aim to simplify remortgaging, and encourage competition within the mortgage market.
7 days ago
Lloyds Banking Group has jumped on the bandwagon to boost lending for first-time buyers as they allocate an additional £4 billion to help first-time buyers on to the property ladder.
As the Loan to Income (LTI) cap has been increased to 5.5 times income, applicants who fit the First Time Buyer Boost criteria could borrow up to 22% more.
The government is introducing mortgage reforms to boost homeownership, stimulate economic growth, and make the housing market more accessible, especially for first-time buyers.
Chancellor Rachel Reeves has announced the most significant mortgage reforms in over a decade—great news for those dreaming of homeownership.
10 days ago
Nationwide ease their ‘Helping Hand’ mortgage designed to help first-time buyers get onto the property ladder by allowing them to borrow up to six times their income.
16 days ago
Keeping the kids entertained over the six-week summer holidays isn’t always easy, especially with the cost-of-living making it even more difficult. Below is a list of fun, inexpensive ideas to do over the break
The Financial Conduct Authority (FCA) has published a discussion paper about the future of the mortgage market in a bid to improve access for first -time buyers, self-employed, and those borrowing in retirement.
Ever wondered where the most reasonably-priced towns for families to buy are? Property company, Zoopla has identified the top 10 towns for families to live in the UK by looking at the most affordable towns, and how many people are looking in that area.