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3 November, 2020 Open access

FCA announces further proposals to enhance support for mortgage borrowers impacted by coronavirus

New draft guidance includes extended deadline for borrowers to request payment deferrals and provision to prevent any borrower losing their home before 31 January 2021

The Financial Conduct Authority (FCA) has announced further proposals to enhance support for mortgage borrowers impacted by the coronavirus pandemic.

As a result of the increasing regional and national COVID-19-related restrictions announced in recent weeks, the FCA's new draft guidance to lenders outlines measures that continue, and build on, the support package that has been in place since March 2020 when the Chancellor Rishi Sunak announced the first three-month mortgage payment deferral.

In particular, the guidance includes proposals to extend the availability of payment deferrals, enabling requests for deferrals beyond the current 31 October 2020 cut-off date up to 31 January 2021, meaning that -

NB - the FCA advises that guidance issued in September 2020, relating to the provision of tailored support for those who are not eligible for further payment deferrals, will continue in force.

In addition, the draft guidance requires that lenders do not enforce repossessions nor seek, or enforce, a warrant for possession or a warrant of restitution before 31 January 2021.

The FCA confirms that the proposals, which are subject to a short ‘comment period’ until 10 am on Thursday 5 November, will be finalised and published ‘as soon as possible’ after the comment period closes.

Commenting on the proposals, the FCA's Interim Executive Director of Strategy and Competition Sheldon Mills said -

‘We are working with lenders to ensure enhanced support remains available to borrowers struggling financially following changes in the coronavirus situation across the UK.

Tailored support will still be offered and remains the most appropriate option for many borrowers, but we are proposing to extend payment deferrals for additional support. We also want to make sure no one has their home repossessed during this time.

‘It is in borrowers’ own long-term interest only to take a payment deferral when absolutely necessary. Those that are able to keep paying, should do so. This allows support to be targeted to those most in need.

‘We are also asking borrowers not to contact their lender yet, and instead wait for further updates, including from their lenders, soon.’

For more information, see FCA announces further proposals to support mortgage borrowers impacted by coronavirus.