This update from the BSA and National Housing Federation (NHF) sets out the support shared owners can expect from their housing association and their mortgage lender during the coronavirus crisis.
Support for shared owners from housing associations
Housing associations are not-for-profit landlords to more than six million people, including around 185,000 shared owners.
Housing associations are keeping residents – including shared owners - safe and supported in their homes, keeping vital services running, and helping communities to respond.
They know that many shared owners will be worried about their income. Shared owners who are worried should contact their housing association who will want to help.
During this crisis housing associations are committed to:
1. Keeping people secure at home
During this crisis no shared owner will be evicted from a housing association home as a result of financial hardship caused by coronavirus.
2. Helping people to get the support they need
Housing associations have teams ready to help shared owners to access benefits and other support to alleviate financial hardship. This could include
- support to access universal credit – which will cover the cost of rent and service charges for shared owners in many circumstances
- support to access other forms of help – for example with paying bills, council tax, and hardship funds
- support with financial advice, budgeting and other help to deal with the impact of loss of income
3. Acting compassionately and quickly where people are struggling to pay rent
Housing associations are working with shared owners to understand how they can help them. This can include flexibility on when to collect rent and other charges where that would make a difference, and working closely with the shared owner to agree an affordable and sustainable repayment plan for any arrears that are built up.
4. Working with lenders to join up support
Housing associations recognise that many shared owners will also be worrying about how to pay their mortgage. Associations will work closely with lenders to ensure support for the shared owner is joined up.
Support for Shared Owners from mortgage lenders
Mortgage lenders are supporting home-owners, including shared owners, during these difficult times. We know that many shared owners have experienced financial difficulties because of coronavirus and we are committed to helping them through this period.
If they are worried about paying their mortgage home-owners should contact their mortgage lender who will be able to help.
During this crisis mortgage lenders are committed to:
1. Keeping people in their homes
There is a moratorium on lenders repossessing properties which means home-owners will not lose their homes at their difficult time. This moratorium is in place until the end of October.
2. Helping with costs – mortgage payment holidays
Mortgage lenders have agreed over 1.8 million mortgage payment holidays, or deferrals, of up to 3 months for customers whose finances may have been affected by the coronavirus lockdown. Many of these are shared owners.
Customers who have not yet applied for a payment deferral and are experiencing financial difficulties due to coronavirus will still be eligible to apply until 31 October 2020.
Mortgage lenders are now providing a further three months full or partial payment deferral if a shared owner needs one.
This is not necessarily the best option for everyone and it will always be in the borrower’s best interests to pay their mortgage if they are able to. If a shared owner is experiencing financial difficulties because of coronavirus then there are a range of other options that mortgage lenders can provide which may help. These include extending the length of the mortgage to reduce monthly payments or switching to another product such as an interest-only.
3. Product switches
Lenders’ voluntary agreements are in place so that existing customers may be offered a new mortgage product at the end of their existing deal so that they do not revert onto the reversion rate or SVR.