On 11th March, the Governor of the Bank of England, Mark Carney announced that interest rates would be reduced to 0.25% in order to support businesses and consumer confidence during a time of crisis.
Less than a week later, Chancellor Rishi Sunak unveiled £330bn of extra support to help businesses and individuals deal with the financial difficulties that are being caused by the Covid-19 outbreak.
These two decisions highlight the Chancellor’s comments during a news conference, that a “collective national effort” would be required to get us through this.
On 17th March, Sunak announced he has been working with banks and building societies to allow those impacted by the Covid-19 to provide payment ‘holidays’ to those affected.
“We will support jobs, incomes and businesses”. Rishi Sunak, Chancellor.
NatWest and Lloyds Banking Group had already announced measures to help customers affected by the virus, but the Government’s announcement means that all residential mortgage lenders will offer a three-month payment holiday, which we believe will put a lot of our clients minds at ease, especially as mortgage payments can be in the region of 50% of essential outgoings.
We don’t know whether a 3 month holiday will be enough, but the Chancellor did state this was the ‘next step’ of the government’s measures, so we hope that our clients and the rest of the UK will continue to get the support they need and deserve.
If you are affected by the outbreak of Covid-19, we advise you to contact your mortgage lender directly with regards to applying for a payment holiday. We also strongly recommend that your lender confirms to you, that the mortgage payments are being ‘deferred’ and not ‘missed’, so it does not affect your credit rating. You bank should be able to advise you on this.
However, we only recommend taking such a holiday if essential as it will only extend the borrowing period – meaning you will be paying your mortgage for longer, which is not ideal unless absolutely necessary.
On 18th March, the government confirmed that has been extended landlords also. We’ll be keeping a close eye and will report anything as soon as we can.
If you have any questions, please do not hesitate to take advantage of our live chat facility on the website.
Stay strong, Stay Safe.
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