LATEST: FCA extends landlords mortgage ‘holiday’ scheme until July

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Landlords seeking a new mortgage payment deferral or who want to extend an existing one have been given a new cut-off date for the scheme of July 2021.

The date has been revealed by the Financial Conduct Authority (FCA). It says lenders must allow landlords to extend ongoing payment deferrals after the original cut-off date of 31^st March 2021 up until July next year. Borrowers are able to take ‘holidays’ of six months in total, but it can be taken in tranches.

Also, landlords newly impacted by the pandemic have until the beginning of February to request a deferral as the scheme runs for a maximum of six months.

The FCA has also said lenders should not downgrade a landlords’ credit rating if they do request a mortgage payment deferral, although documentation shown to LandlordZONE by a leading buy-to-let broker suggests that some lenders are rejecting applications if a landlords has received other kinds of Covid-related government support.

But industry organisations Safeagent has questioned whether the new FCA guidelines are the right approach at all.

“We question if deferral of mortgage payments is the answer, or if it pushes the problem further down the track,” says its Chief Executive Isobel Thomson.

“While lenders will be adhering to the guidance which provides up to six months deferral, we know it may take badly affected tenants much longer to get back on their feet, meaning landlords could be building up debt and struggling to meet mortgage payments for many months to come.

Safeagent is calling on the government to introduce grants or loans for landlords who have tenants are in receipt of Universal Credit and whose housing payments do not cover all their rent.

“This would recompense landlords for the shortfall on their mortgage and any additional interest over the period.”

Read more about the mortgage holiday.
Read the guidance in full.

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