Press release

BSA comments on today's announcements of support for mortgage borrowers

Commenting on the announcements from the Economic Secretary to the Treasury, John Glen MP and the FCA on support for mortgage borrowers, Robin Fieth, Chief Executive of the Building Societies Association (BSA) said:

“We welcome today’s announcements by the Economic Secretary to the Treasury and the FCA and the close collaboration between Treasury, lenders and regulators which has led to them.  Looking ahead we would encourage those borrowers who are able to pay to do so, as this will be to their own longer-term benefit.  However, borrowers can also be assured that there will be no cliff-edge moment as tailored support will be available for those who need it, whenever that may be. 

“Mortgage payment holidays will continue to be available until 31 October for those who have not had one.  We are pleased that there will be no automatic blanket extension to existing payment holidays as we do not believe extending payment holidays will be in the best interests of most borrowers, although individual extensions remain an option which may be right for some. 

 “Possession is always a last resort for lenders and with the extension of the repossessions moratorium, homeowners should also be reassured that they are secure in their own homes.

“Lenders will be contacting all borrowers with a repayment holiday before it comes to an end to lay out potential next steps and the support that is available.  Any borrower with concerns is encouraged to get in touch with their lender sooner rather than later.  Lenders will be working hard to provide support to all who need it as quickly as they can.”     

Consumer research

The BSA conducted consumer research with YouGov between 7 and 15 May to understand consumer views and likely behaviour.  The results from a sample of 439 homeowners and 65 landlords with a mortgage repayment holiday shows that:

  • Mortgage payment holidays have helped people in tough times with 90% saying that it has been fairly or very helpful and just 8% saying that it has been not very or not at all helpful.  More landlords say that it has not been helpful at 21%.
  • The majority (68%) of these borrowers are fairly or very confident that they will be able to meet their mortgage payments once their payment holiday ends. However, there are a substantial minority (27%) who are not very or not at all confident that they will be able to pay.  Lenders will target tailored support for these people in particular, to ensure that they get the help that they need.  Landlords seem to be less certain than homeowners with 34% not very or not at all confident that they will be able to pay.
  • The results indicate that the preferred repayment method for most is to repay over the remainder of their mortgage term with 53% of homeowners and 32% of landlords favouring this approach.  Amongst homeowners taking a mortgage holiday, 15% say that they would seek an extension to their payment holiday compared to 18% of landlords taking mortgage

Press Contacts:

Hilary McVitty – Tel: 07741 984042

Amy McCluskey – Tel: 0207 520 5927

Notes to Editor:

Details for these three questions follow. In the columns, “Homeowners” shows responses from those that have taken a mortgage holiday on their own home(s), and “Landlord/Buy to let” shows responses from those that have taken a mortgage holiday on a property that is rented out to others.

Overall, how helpful, if at all, have you found the mortgage payment holiday(s)?

Option

Homeowners (%)

 

Landlords
(%)

All

(%)

Fairly/very helpful

93

75

90

Not very/not at all helpful

6

21

8

Don’t know

2

4

2

 

After the payment holiday expires how confident are you that you will be able to meet the financial commitments of your mortgage(s)

Option

Homeowners (%)

 

Landlords
(%)

All

(%)

Fairly/very confident

68

62

68

Not very/not at all confident

26

34

27

Don’t know

6

4

6

 

Borrowers preferred exit plans: most want to pay over the remainder of the term

Option

Homeowners (%)

Landlords
(%)

All

(%)

Repay the interest gradually over the rest of the term of the mortgage

53

32

51

Extend the mortgage to reduce the amount of each monthly payment

10

24

12

Seek an extension to the payment holiday

15

18

15

Repay the interest in 1 lump sum

7

15

8

Switch to interest only

2

3

2

Other

1

1

1

Don’t know

12

6

12

 

Base:  all GB adults who are taking a mortgage payment holiday as a result of the coronavirus outbreak. N=486 split between Owner Occupied– 439 and Buy-to-Let- 65.

All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 11,657 adults.  Of these, 486 reported having taken mortgage payment holidays as a result of the coronavirus outbreak (439 owner occupier homeowners, 65 Buy to Let, such that 18 had both).

Fieldwork was undertaken between the 7 & 15 May 2020.  The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).     

Contact

Amy McCluskey

Press and Publications Officer

amy.mccluskey@bsa.org.uk

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