As measures to deal with the effects of the coronavirus continue to change and multiply, one of the most urgent things for many people is how they will keep a roof over their head.
The country is heading for almost complete lockdown and major firms are either laying off workers or going broke. All of those employees and the others forced to stay at home in self-isolation are desperate to get either their mortgages or rents paid.
Three month holiday
The government has promised them all a three month holiday from their housing costs, but how will it work in practice?
UK Finance is the trade body for the British banking system and a spokesman said: “Under usual circumstances, the lender would have to assess the customer’s finances and consider what forbearance options may be the most suitable.
“This is being waived to allow firms to implement a more straightforward process in an otherwise stressful time.”
The first thing to do is to contact your lender, many of which now have detailed information on their websites for people affected by loss of earnings from the virus.
UK Finance said It is important to take this first step as soon as you think you may have a problem.
Your lender will want to check your account before making any agreement so have your account or customer number ready to hand, together with information about your current monthly payments and how badly your income has been affected.
Your lender may be able to offer you a complete mortgage holiday, which means you will have nothing to pay for up to three months.
But that won’t be the case for everyone. They may offer you the opportunity to change your mortgage so you will end up paying less a month and such an arrangement would continue after the crisis is over.
UK Finance CEO Stephen Jones said: “Monthly mortgage payments tend to be the largest outgoing for the vast majority of households and lenders want to reassure both homeowners and landlords who have tenants who may be affected financially that the industry is working hard to put measures in place to support them during these uncertain times.
“In addition to the industry’s support for residential homeowners, mortgage lenders are extending the same support to buy-to-let landlords who have tenants experiencing issues with their finances as a result of Covid-19 and the options include a payment holiday of up to three months.
“For those customers already experiencing financial difficulty, lenders have also agreed a three-month moratorium on residential and buy-to-let possession action.
The industry wants to reassure customers that they will not have their homes repossessed at this difficult time and therefore, these measures will start from tomorrow (19 March 2020).
“All customers who are concerned about their current financial situation should get in touch with their lender at the earliest possible opportunity to discuss if this is a suitable option for them.”
The three month holiday is slightly different for those renting their homes.
Buy-to-let landlords will be given the holiday to preserve their income and enable them to be as flexible as possible with their tenants.
At the same time the government is introducing emergency legislation to prevent any landlord starting eviction proceedings against tenants affected by the coronavirus.
Housing minister Robert Jenrick said the arrangements might be extended if the situation was not resolved at the end of three months, adding: “No renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts.
“These are extraordinary times and renters and landlords alike are of course worried about paying their rent and mortgage.
The changes will protect all renters and private landlords, ensuring everyone gets the support they need at this very difficult time”.
The Residential Landlords Association and the National Landlords Association said in a joint statement: “Our priority is to ensure that tenants are secure in their homes during this crisis.
The three month buy-to-let mortgage payment holiday will take a lot of pressure off landlords enabling them to be as flexible as possible with tenants facing difficulties with their rent payments.
“No responsible landlord will be considering evicting tenants because of difficulties arising from the current situation.”