Mortgage Lenders Suspend House Repossessions Over Christmas
On 9 December 2021, mortgage lenders announced that they will continue to provide support for struggling homeowners by temporarily suspending house repossessions over the festive period.
This freeze on house repossessions shadows a much longer 12-month pause enforced between April 2020 and April 2021, which similarly aimed to help those who were struggling financially due to the pandemic. At that time, the Financial Conduct Authority (FCA) also said lenders should grant three-month payment holidays to struggling homeowners.
Financial Relief Throughout December
During the Christmas period, all banks and building societies who are members of UK Finance and the Building Societies Associations have agreed not to seek or enforce a warrant for the repossession of homes and buy-to-let properties. Repossessions will be put on hold between 13 December 2021 and 4 January 2022.
The announcement follows a poll conducted by StepChange, a debt charity operating across the UK, which found 22% of respondents were planning to cut back on normal expenses over Christmas. Moreover, only 45% of those celebrating it said they could “comfortably” afford it.
Mortgage Arrears on the Decline
In November, UK Finance published their quarterly mortgage arrears data, which showed that mortgage arrears continued to fall to near historic lows in the third quarter. They linked this decline with government support for household incomes through the Coronavirus Job Retention Scheme (CJRS) – more commonly known as the furlough scheme – remaining in place until 31 September. Compared with Q2, the trade body also found that there was a reduction of 2,400 mortgages in arrears of 2.5% or more of the outstanding balance.
Paul Broadhead, head of mortgage and housing policy at the Building Societies Association, stated: “Repossessing someone’s home is an absolute last resort and lenders do all that they can to provide people suffering financial difficulties with the tailored support that they need.”
He added: “The aim is to help people get back on their feet, but this Christmas and New Year moratorium will give some respite to those who have reached the end of the road. For anyone who is facing financial difficulty the message is to get in touch with your lender early, as this gives the best chance of success.”
Meanwhile, Eric Leenders, a managing director at UK Finance, similarly explained the pause will provide customers with “peace of mind that they will stay in their homes over the festive period”. He also urged people to “contact their lender as soon as possible if they need support.”
Whilst these measures may provide temporary relief to some, remember that we are on hand to help stop the repossession of your home if you are facing eviction. Our experienced team at HMS is dedicated to finding a solution to your problem. Click here to get started or call 0808 109 3559 for free advice.