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:
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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+).