One in seven mortgages has become subject to a mortgage payment holiday as increasing numbers of people are affected by the Covid-19 crisis.
In March, the government introduced measures enabling homeowners to temporarily stop or reduce their monthly mortgage repayments if they were struggling to meet the cost due to a change in circumstances.
The latest data by UK Finance showed that as of 24 April, lenders had given over 1.6 million mortgage payments, with the average payment amounting to £775 per month per person.
More than 1.2 million mortgage payment holidays were approved in the first three weeks of the scheme, with over a third of all payment holidays approved between 25 March and 1 April alone, as lenders moved quickly to help homeowners impacted by Covid-19, the figures revealed.
Stephen Jones, CEO, UK Finance, said: “Lenders understand that many households are seeing their finances squeezed due to the coronavirus pandemic and we are working hard to help customers get through these tough times.
“The industry has acted quickly to support homeowners through this crisis and has taken decisive steps to ensure that eligible customers on payment holidays due to Covid-19 can opt for the security of fixing their monthly mortgage payments going forward.”
Lenders continue to offer product transfers enabling existing customers who came to the end of a fixed term product to move to a new deal and the industry has also announced additional help for homeowners on payment holidays or for those who have been furloughed. Under normal circumstances, payment holidays would not qualify for a product transfer but lenders have waived this rule to help deal with Covid-19.
Robin Fieth, chief executive, Building Societies Association, commented: “The Covid-19 situation means that right now times are far from normal and many households are worried about their finances.
“Lenders are working hard to help in a range of ways and it is right that this now includes the ability for those on a three-month payment holiday to be able to switch onto a new product with their existing lender at the end of a fixed term product should the two events coincide.”
