Mortgage Holidays

Mar 26, 2020

In these unprecedented times both mortgage lenders and borrowers are encountering new situations and potential challenges to their usual mortgage arrangements. Here we seek to clarify the current position for those with a mortgage secured against property.

On 20th March the Financial Conduct Authority (FCA) issued new guidance to clarify the standards and behaviour now expected of the lenders that they regulate, which follows the government’s recent raft of measures announced to help support borrowers during this challenging time. The guidance includes advice that mortgage lenders should grant borrowers a payment holiday on sums owed under existing mortgages. Initially this will be for a period of 3 months in instances where the borrower experiences payment difficulties as a result of coronavirus (Covid-19).

Any borrower wanting to arrange a payment holiday should contact their mortgage lender to establish the measures that will apply to their particular loan. Some lenders, such as Barclays have confirmed that initially these measures will only be available for residential mortgages, however others, such as Nationwide have confirmed that repayment holidays will be available for a wider group of borrowers, including to buy-to-let landlords to help alleviate pressure on both landlords and tenants from the financial impact of Covid-19. For banks and lenders this has the added effect of reducing the risk of having ‘bad debt’ on their books in the event that borrowers are unable to keep up with repayments where a repayment holiday is not offered.

The FCA guidance then goes on to confirm that during a mortgage holiday there should be no additional fees or charges applied to the loan other than additional interest.

Finally, the FCA have advised their members that in the current circumstances, they do not consider that repossession of properties from renters in either social or private accommodation will be in the best interests of the customer. As such any lender seeking to repossess a property within these categories during this time should only exercise this right where they can clearly demonstrate that the customer has agreed to this course of action being in their best interests.

The above is intended as a brief guide only and should not be relied upon as specific legal advice. The details are correct as at 24 March 2020.

If you require further advice regarding secured lender or any other Real Estate matter, please contact Steph Richards in our Real Estate department. You can also email your query to realestate@herrington-carmichael.com or steph.richards@herrington-carmichael.com , call 01276 686222 or visit https://www.herrington-carmichael.com/.

This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sign up

Enter your email address for legal updates on Private Client & Family Law.

Please see our privacy policy regarding use of your data.


Contact us

Support for you, your family and your business. Get in touch today by phone or enquire online. 

Tel: +44 (0) 1276 686 222

Top read insights in 2019

Contract Law

Material Breach of Contract

What is a ‘material’ breach of contract by a party to a commercial contract? This is a critical issue regularly considered by the courts. What constitutes a material breach and what are the remedies?

Property Law

Purchasing Land – Option Agreements

A developer and a landowner can enter into an Option Agreement. What are the strategies that can be employed by both landowners and developers to assist in such land deals?

Divorce and Family Law

What are the Tax Implications of a Civil Partnership?

Is there a significant tax saving to be made by a couple who are married or in a civil partnership that cohabitating couples simply don’t qualify for?  

Land & Property Dispute

Restrictive Covenants – The Price of Modification

Having identified that your land is burdened by a restrictive covenant and for the purposes of this article the covenant in question will be that only one residential building can be erected on the land. What do you do next?

Wills, Trusts and Probate

Is my Will applicable to my Spanish property?

You must be careful when relying on an English Will in relation to your Spanish property.

Awards | Accreditations 

Accredited Conveyancing Lawyers
Accredited Immigration & Asylum Lawyers
Accredited Conveyancing Lawyers
Accredited Immigration & Asylum Lawyers
London

60 St Martins Lane, Covent Garden, London, WC2N 4JS 

+44 (0) 203 755 0557

Camberley

Building 9, Riverside Way, Watchmoor Park, Camberley, Surrey. GU15 3YL. 

+44 (0)1276 686 222

Wokingham

27 Broad Street, Wokingham, Berkshire. RG40 1AU.

+44 (0)118 977 4045

info@herrington-carmichael.com

© 2020 Herrington Carmichael LLP. Registered in England and Wales company number OC322293.

Herrington Carmichael LLP is authorised and regulated by the Solicitors Regulation Authority.

Privacy   |   Terms and Conditions   |   Cookies   |   Client Feedback