Rishi Sunak announces three month mortgage payment ‘holiday’ for any homeowner hit hard by coronavirus as the Chancellor vows to make sure people can ‘get back on their feet’
- Rishi Sunak today set out a massive package of measures to combat coronavirus
- Anyone in ‘difficulty’ due to virus will not have to pay mortgage for three months
- Chancellor said that Britain had ‘never faced an economic fight’ like coronavirus
- Coronavirus symptoms: what are they and should you see a doctor?
Rishi Sunak today announced any homeowner who is adversely affected by coronavirus will be eligible for a three month mortgage payment ‘holiday’.
The Chancellor this afternoon set out a massive economic stimulus package designed to keep the UK economy afloat as the outbreak hits business hard.
Mr Sunak pledged to make available at least £330 billion in government-backed and guaranteed loans which struggling firms will be able to access to pay workers and suppliers.
But he also unveiled unprecedented help for families as he said anyone in ‘difficulty’ because of the virus will be able to get a three month reprieve from payments on their homes.
The announcement is likely to be warmly received by workers who may be fearing for their jobs due to the government’s lockdown policy which has left many sectors facing financial carnage.
However, Labour’s shadow chancellor John McDonnell suggested the package did not go far enough and questioned what would be done by ministers to help people in the private rented sector.
Chancellor Rishi Sunak today announced anyone facing difficulty due to coronavirus will be eligible for a three month mortgage payment holiday
Speaking alongside Boris Johnson, Mr Sunak said ‘people will not have to pay a penny towards their mortgage while they get back on their feet’
How will the coronavirus mortgage ‘holiday’ work and who is eligible?
What has Rishi Sunak announced: Mortgage lenders have agreed with the Treasury that any customers who are in ‘difficulty’ due to coronavirus will be eligible for a three month payment ‘holiday’.
What does in ‘difficulty’ actually mean: The Chancellor did not specify in his address but the Treasury’s coronavirus guidance said eligibility will apply to anyone ‘experiencing issues with their finances as a result of Covid-19’. It is unclear exactly how homeowners will demonstrate to banks that they are in ‘difficulty’.
Is this the same as what other countries have done: In broad terms, yes. Spain, France and Italy are all introducing temporary moratoriums on mortgage payments for citizens affected by the disease.
What about people who rent: The Chancellor did not announce any specific measures to help people in the private rented sector, prompting an immediate outcry from opposition politicians. Calls are likely to grow in the coming days for renters to be offered the same three month payment ‘holiday’.
Standing next to Boris Johnson in 10 Downing Street, Mr Sunak set out a raft of measures designed to stop the UK economy crumbling in the weeks and months ahead.
He said Britain had ‘never faced an economic fight like this one’ but he insisted the nation is ‘well prepared’ and will ‘get through this’.
Repeatedly stressing that the government will do ‘whatever it takes’, Mr Sunak said financial support was not restricted to business alone.
He said: ‘Following discussions with industry today, I can announce that for those in difficulty due to coronavirus, mortgage lenders will offer at least a three month mortgage holiday – so that people will not have to pay a penny towards their mortgage while they get back on their feet.’
Mr Sunak did not explain how homeowners will be asked to demonstrate to banks that they are in financial trouble due to the outbreak.
The Chancellor also said that in the ‘coming days’ he would ‘go much further to support people’s financial security’.
He vowed to work with industry and trade unions to ‘urgently develop new forms of employment support to help protect people’s jobs and incomes through this period’.
‘I want to reassure every British citizen, this government will give you all the tools you need to get through this,’ he said.
‘We will support jobs, we will support incomes, we will support businesses, and we will help you protect your loved ones. We will do whatever it takes.’
Mr McDonnell said many workers were already being laid off due to disruption caused by coronavirus and that Labour was ‘disappointed that this package does not address their concerns’.
He added: ‘The further announcements laid out by the Chancellor lack the certainty required amidst growing public anxiety, and still do not go far enough in protecting workers, renters and those who are losing their jobs, or in fully supporting businesses at the scale necessary.’
Sir Keir Starmer, the Labour leadership challenger, said it was ‘obvious’ the economic measures put forward by Mr Sunak ‘don’t go far enough’ as he also bemoaned a lack of support for people who rent their home.
He said: ‘There is no support for millions of renters, no new money for social care or the elderly, there is no clarity on employment support and no new money for already stretched public services.’
Lib Dem MP Layla Moran echoed a similar sentiment as she said: ‘Renters should be offered equal relief to homeowners, in the form of a three-month break from payments, should they need it.’
Paresh Raja, CEO of the bridging loan firm Market Financial Solutions ‘This is welcome news and builds on the bold commitments made by the Chancellor in last week’s budget.
‘Mortgage holders struggling to stay on top of their repayments will now have a three-month window to reassess their finances.
‘This announcement could also not come soon enough – the COVID-19 pandemic is posing significant challenges for consumers, investors and businesses alike, with the situation changing every day.’