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Ban on repossessions extended until April

Christina Hoghton
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Christina Hoghton

Contact your lender if you are unable to meet your monthly mortgage repayments and they will discuss your options

The financial regulator has issued new guidance extending the ban on repossessions by two months until 1st April, in light of the worsening pandemic.

The Financial Conduct Authority said that firms should not enforce repossessions before 1 April 2021.

It cited the ‘worsening coronavirus situation and the government’s tighter coronavirus-related restrictions which mean that consumers could experience significant harm if forced to move home at this time as a result of repossession proceedings’.

Mortgage lenders said they support the move for both buy-to-let and residential mortgages. They will not issue a warrant for eviction or enforce an existing warrant before 1 April 2021, although they can commence court action, including obtaining a possession order from the courts.

The move follows the government’s extension of the moratorium on private tenant evictions until 21 February 2021 in England. Wales and Scotland have banned rental evictions until 31 March 2021.

UK Finance which represents lenders said that the extension will ‘help provide reassurance to both residential and buy-to-let borrowers that they will not have their homes repossessed at this difficult time’.

What if you can’t pay your mortgage?

Customers impacted by Covid-19 can still make use of payment deferral support – or payment pauses – until July, but you must apply before the end of March.

For customers already in arrears before Covid-19 and who continue to be unable to make payments towards their mortgage, lenders will be in contact to work towards resolving their case, this could include customers choosing for possessions to go ahead.

Lenders will continue to show flexibility to borrowers in financial difficulty and possession is always a last resort, however, it’s always better for customers to pay if they can otherwise the debt will continue to increase.

Eric Leenders, managing director of personal finance at UK Finance, said: “The industry is fully supportive of a moratorium on possessions remaining in place until 1 April 2021 to ensure customers do not lose their home at this difficult time. This is part of a package of support provided by lenders for those who need it, including payment deferrals and tailored assistance.

“It is vital that customers who are concerned about their finances go online or contact their lender to understand what options and support are available to them.”