All repossessions of home owner and landlord properties will go on hold for three months, UK Finance has revealed.
The moratorium on court action comes after the government announced extraordinary measures to help borrowers through the coronavirus crisis.
Earlier this week the chancellor Rishi Sunak announced that home owners would be able to ask their lender for a three-month holiday on mortgage repayments and last night this was extended to landlords
UK Finance has now confirmed that lenders will “stay” all repossession proceedings from today. This means:
- 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
Chief executive Stephen Jones says: “Monthly mortgage payments tend to be the largest outgoing for the vast majority of households and lenders want to reassure both homeowners and landlords who have tenants who may be affected financially that the industry is working hard to put measures in place to support them during these uncertain times.
“In addition to the industry’s support for residential homeowners, mortgage lenders are extending the same support to buy-to-let landlords who have tenants experiencing issues with their finances as a result of COVID-19 and the options include a payment holiday of up to three months.
“For those customers already experiencing financial difficulty, lenders have also agreed a three-month moratorium on residential and buy-to-let possession action.
“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 March 19.
“All customers who are concerned about their current financial situation should get in touch with their lender at the earliest possible opportunity to discuss if this is a suitable option for them.”
Building Societies Association chief executive Robin Fieth says: “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 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.”
How will the possession moratorium 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.
