Almost eight months on from the first period of isolation, we find ourselves once again enduring another month of staying in to stay safe.
However, despite the most challenging year many of us can remember, the buy-to-let market seems to have proved remarkably resilient.
Take the number of landlords opting for a payment holiday. And before I go on, I have to say that the term payment holiday is a bit of a misnomer – it’s more accurate to describe it as a payment deferral.
While millions of residential mortgage holders have taken a payment deferral during the Covid-19 pandemic, just eight per cent of landlords have applied for a buy to let equivalent deferral period, with 94 per cent saying they have no plans to apply for one either.
That’s an incredible figure considering the number of tenants who’ve been in receipt of furlough payments in recent months and who’ll continue to receive them as we ride out this next period of lockdown.
As we go into the winter months, I’m pleased to see the Financial Conduct Authority (FCA) has outlined additional support for borrowers with the payment deferral scheme extended for a further six months for buy-to-let and residential mortgage holders.
But the key message to pass on to your customers here is that if they can afford to make their monthly mortgage payment, then they should continue to do so.
Customers will still be accruing interest on their mortgage during any agreed period of deferment and they’ll still have to repay the deferred payments back at a later date.
If they do decide to take a payment deferral, those who’ve not yet taken the maximum number of payment deferrals under the current scheme, but who may find themselves in need, will now be able to get financial support.
Further forbearance may still be possible for those borrowers who’ve already taken the maximum number of allowed payment deferrals and they should be encouraged to speak directly with their mortgage provider to discuss their circumstances.
Nevertheless, it’s good to see such decisive action taken so quickly.
I’ve supported the scheme since it was introduced back in March and my opinion of it hasn’t changed – we must continue supporting borrowers.
I’d much rather see the payment deferral period extended than people go into arrears. As before, this further extension will give them some much-needed breathing space.
We understand it’s been a difficult few months and we’re determined to deliver the best possible help we can to customers until they’re back on their feet again.
Protecting people and their most valuable assets – their properties – is of paramount importance during these turbulent times, and so the payment deferral extension will give landlords and their tenants some invaluable security in the coming months.
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