Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether it is the Government's policy that people who are unemployed as a result of the covid-19 outbreak will be entitled to a further mortgage holiday.

Financial Conduct Authority (FCA) guidance released on 17 November outlines that the application deadline for mortgage holidays ends on 31 March. Up until this date, borrowers who have not yet taken a payment holiday will still be able to apply for one and borrowers who have taken an initial payment holiday will be able to top this up to six months. This will not be reflected on the consumer’s credit file. However, the FCA guidance also notes that all payment holidays will need to end by 31 July (with all credit file reporting returning to normal from that date).

After 31 March, the FCA’s guidance sets out that firms should continue to provide support through tailored forbearance options for those borrowers that are facing ongoing financial difficulties. This could include granting new mortgage payment holidays. As part of this guidance any forbearance granted beyond six months of payment holidays will be reflected on the consumer’s credit file in the usual manner. As borrowers still requiring assistance after that point could be in serious financial distress the FCA believe it is right that lenders are able to understand their financial position in order to lend responsibly.