Mortgage lenders will not repossess residential and buy-to-let properties from today for the next three months for borrowers affected by the coronavirus.
They are also suspending all repossession orders currently active, however, formal demand notices telling borrowers how much they owe will continue to be issued but not acted upon for 90 days.
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A joint statement from trade bodies UK Finance and the Building Societies Association (BSA) set out how the operation to pause possessions will work:
- Lenders will suspend all possession orders
- Lenders will not commence any court action, including putting the case to court or instructing on matters
- Lenders are able to issue a formal demand, so that the customer is aware of the money they owe and are informed that the case will eventually go to possession proceedings
- This letter is valid for eight weeks, but firms will agree not to take any further steps until the end of the 90-day period
- There are exceptions for empty properties or where the customer wants the possession to go ahead
- In buy-to-let, lenders would still use a Receiver of Rent where appropriate but would not move to possession if the tenant could not pay
The easing of possessions is in addition to the flexibility announced for affected residential borrowers and buy-to-let landlords outlined over the previous two days.
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This includes up to three months mortgage payment holiday and other flexibility from lenders.
Robin Fieth, chief executive of the Building Societies Association (BSA) said: “Building societies are acutely aware that this is a worrying time for those with a mortgage or who pay rent as both typically account for a significant proportion of household expenditure.
“Now is a time for lenders to be flexible. The steps being taken by the industry today will offer some breathing space for those affected by the Covid-19 situation whether directly or indirectly.
“The best first step advice remains to get in touch with your lender or landlord.”
UK Finance CEO, Stephen Jones, added: “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 19 March.”
Written by: Owain Thomas
Source: Your Money