Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what recent assessment his Department has made of the potential effect of the end of the Coronavirus Job Retention Scheme on the level of mortgage arrears.

Prior to the pandemic, mortgage arrears were at historically low levels.

At the height of the pandemic, the Government worked with the Financial Conduct Authority (FCA) to oversee an unprecedented package of forbearance measures for mortgage customers, including the provision of 2.9 million mortgage payment holidays and a ban on repossessions.

The Coronavirus Job Retention Scheme (CJRS) was also set up to support employers to retain their employees through the Covid-19 pandemic. To date, the scheme has succeeded in supporting 11.6 million jobs across the UK with employer claims totalling £68.5 billion, aiding businesses and protecting livelihoods.

While these measures have ended or are coming to a close, the Government will continue its efforts to support mortgage borrowers. For example, the Government will continue to offer Support for Mortgage Interest (SMI) loans to homeowners in receipt of an income-related benefit to help prevent repossession. The Government also aims to help people avoid repossession through protection in the courts under the Mortgage Pre-Action Protocol which makes it clear that repossession must always be the last resort for lenders. In addition, FCA guidance requires firms to continue providing support through tailored forbearance options, including further payment holidays, for borrowers facing ongoing financial difficulties as a result of Covid-19. Any borrowers worried about their mortgage payments should make early contact with their lender to discuss their options.

Bank of England data published on 14 September 2021 shows that arrears levels remain low, with the proportion of total loan balances with arrears at 0.89%.