UK mortgage arrears and repossessions will increase after the debt payment moratorium ends on 1st April 2021 (and indeed sooner for exceptional cases).
The Financial Conduct Authority (FCA) is keeping this date under review.
However, UK Finance, a trade association for the UK banking and financial services sector, formed on 1 July 2017, has forecast mortgage arrears will rise from last year’s 81,300 to 142,200 this year but fall in 2022 to 120,900 and home repossessions rise from last year's 2,900 to 22,300 by 2022.
Guidance released this month by the FCA regarding Mortgages and Coronavirus outlines tailored support guidance and protocols mortgage lenders and other financial firms should employ if borrowers are struggling.
Guidance for deferral of payments confirms that all borrowers can delay payments for up to 6 months as long as their last monthly instalment is no later than July 2021.
All customers should receive appropriate payment relief from their lender and the FCA states: “Customers should receive the support they need in managing their finances including money guidance and self-help. Firms should refer customers to a debt advice if this meets their needs and circumstances”.
It is going to be a tough couple of years for many.