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Coventry launches online form for payment holidays

Coventry Building Society has launched an online form for borrowers affected by the coronavirus.

The building society will grant payment holidays of up to three months for residential and buy-to-let borrowers.

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It stresses that a borrowers’ credit rating will not be affected, but interest will accrue in the holiday period

For residential mortgages, the payment holiday will apply for borrowers who are up to date on their payments, not in arrears, and can confirm they have been financially affected by the pandemic.

Meanwhile, for buy-to-let mortgages, the facility will apply for borrowers who are up to date with their payments, not in arrears and can confirm that their tenants are having difficulty in paying their rent due to coronavirus.

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A spokesperson for Coventry Building Society said:“[We] urge borrowers currently in arrears who are impacted by the coronavirus to call our customer service centre.

“Savings and borrowing members can see the latest updates on the society’s response to the coronavirus situation by visiting our website.”

By Jake Carter

Source: Mortgage Introducer

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HSBC launches mortgage payment holiday and interest-only switch in Covid-19 package

HSBC has set out its support for mortgage borrowers who have been affected by the Covid-19 outbreak.

The bank will offer short term support through reduced or deferred payments for mortgages, with longer term support through extending the remaining mortgage term, switching rates or switching part or all to interest-only mortgage arrangements.

The support package now includes a mortgage payment holiday, which was not previously offered to help borrowers in financial difficulty.

Last Friday, HSBC announced a reduction of 0.15% on its standard variable rate mortgage following the second Base Rate reduction by the Bank of England. It had previously agreed to pass on the full 0.50%.

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Additionally, from tomorrow all bank account and Advance account customers will receive a temporary £300 interest free buffer (which is the equivalent of the weekly National Living Wage) on their current account.

Customers can also access fixed rate savings accounts with no closure charges and a temporary increase in credit card and overdraft limits.

“We are here for our customers in these truly extraordinary times. While we put in place a package of support for customers across a number of product areas, we recently added the option of a mortgage payment holiday, which we had not previously offered, and now we are providing additional relief on overdrafts for millions of our current account customers. This will provide some welcome short term cashflow support at this crucial time.”

Tracie Pearce, HSBC UK’s director of retail banking

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Source: Financial Reporter

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Government extends mortgage payment holiday to BTL

The government has announced a raft of measures to protect renters and landlords during the Covid-19 crisis, including extending the three-month mortgage payment holiday to buy to let investors and stopping evictions.

Last night (March 18), the government confirmed that landlords will also be able to apply for a three-month payment holiday on buy to let mortgages under emergency coronavirus legislation.

This move has been welcomed by landlord organisations, the Residential Landlords Association and the National Landlords Association, which said the 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”.

As part of the legislation housing secretary Robert Jenrick also announced that private tenants could not be evicted from their homes for at least three months if they are struggling to pay their rent.

At the end of this three-month period, the government expects landlords and tenants to work together to “establish an affordable repayment plan” which takes into account tenants’ individual circumstances.

Mr Jenrick MP said: “The government is clear – 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. Which is why we are urgently introducing emergency legislation to protect tenants in social and private accommodation from an eviction process being started.

“These changes will protect all renters and private landlords ensuring everyone gets the support they need at this very difficult time.”

There will also be no new possession proceedings through applications to the court starting during the crisis.

During prime minister’s questions yesterday, Boris Johnson said the government was prepared to bring forward emergency legislation to protect private renters from eviction.

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At the time he said: “We will be bringing forward legislation to protect private renters from eviction, that is one thing we will do but it is also important as we legislate that we do not pass on the problem so we will also be taking steps to protect other actors in the economy.”

Marc von Grundherr, director of letting agent Benham and Reeves, said: “We’re all for state support at a time of crisis however there’s a significant unintended consequence of this announcement and that is the fact tenants now have nothing to lose if they simply stop paying their rent.

“It will simply be used as a literal get out of jail free card for all of the UK’s 16m or so private and social housing tenants and this could leave a path of destruction within the rental market if not correctly implemented and monitored.

“Let’s see what the details reveal but at first glance, this perhaps goes too far unless there are specific criteria that must be met and proven before tenants stop paying and landlords claim their mortgage holiday.

“Ultimately, landlords will still have to pay as this approach is a deferral, not a let off. How will they recoup the rent if tenants are unable or simply refuse to pay it?”

The developments come after chancellor Rishi Sunak announced on Tuesday a £330bn war chest of loans to protect businesses against the financial difficulties caused by the coronavirus.

He also announced mortgage lenders would be forced to provide up to three months’ relief from mortgage payments to consumers who needed it.

This dwarfed the £30bn of government funds announced at the Budget last week.

Meanwhile the spreading coronavirus crisis has caused global markets to tumble as governments across the world shut their borders, locked down domestic travel and closed sports and leisure facilities.

The prime minister has urged everyone to avoid unnecessary social contact, to work from home where possible, and to stay away from pubs and restaurants.

Schools will be shut from Friday afternoon onwards and will remain closed until further notice except for children of key workers and vulnerable children.

Examples of these workers include NHS staff, police and supermarket delivery drivers who need to be able to go to work to support the country’s fight to tackle coronavirus.

By Amy Austin

Source: FT Adviser