The financial watchdog has today extended payment holidays to support those struggling to pay their mortgage due to coronavirus.
The Financial Conduct Authority (FCA) said banks can extend the mortgage holidays for a further three months up to the end of October.
It comes after chancellor Rishi Sunak extended the furlough scheme to October to support millions of workers who would otherwise be laid off during the pandemic.
The watchdog today also extended the time to apply for a mortgage payment holiday until 31 October 2020.
FCA interim chief executive Christopher Woolard said: “Our expectations are clear – anyone who continues to need help should get help from their lender. We expect firms to work with customers on the best options available for them, paying particular attention to the needs of their vulnerable customers, and to provide information on where to access help and advice.”
The current ban on repossessions of homes will also continue until 31 October to ensure people can comply with the government’s plans to self-isolate.
The watchdog has made a series of interventions in recent months as the coronavirus crisis ravages the economy. Last month, it called for a freeze on car finance payments. The financial watchdog said firms should also not take steps to end the agreement or repossess the vehicle.
Industry body UK Finance has welcomed the FCA’s proposals. Chief executive Stephen Jones said: “The industry looks forward to regulatory guidance being finalised swiftly to ensure both borrowers and lenders can plan over the coming weeks. Meanwhile those borrowers who have already taken a mortgage payment holiday and can afford to make payments are encouraged to do so, as this will reduce the level of their repayments in the long run.”
“For those borrowers who have not already applied for a mortgage payment holiday, the industry supports the extension of the availability of payment holidays until 31 October 2020 as this will provide much-needed breathing space for borrowers who need it.”
In addition to the mortgage holidays extension, the watchdog has warned banks not to put pressure on their corporate clients to cut them into business in return for coronavirus loans.
The FCA wrote to lenders to say it had heard “credible reports of a small number of banks failing to treat their corporate clients fairly” while negotiating coronavirus loans.