The Financial Conduct Authority (FCA) is reportedly considering the implementation of long-term mortgage payment holidays for those impacted by coronavirus.
The Times reported that homeowners struggling with their finances because of the pandemic may be given a break from mortgage payments for 12-months.
This follows recent figures from UK Finance revealed that one in seven mortgages are now covered by payment holidays following steps taken by lenders to help households whose finances have been affected by the crisis.
And research from fintech platform Nucoro released today shows that some 5% of borrowers have contacted their bank to discuss a holiday period.
Mortgage repayment holidays were first announced in March and were expected to last for three-month – however the FCA said that it would extend this if required.
Following the launch mortgage professionals have warned that the scheme could lead to financial difficulties in the future.
Dave Miller, client account manager at Spicerhaart Corporate Sales, recently said he believed that while extending mortgage holidays may be welcomed in the short run, “there is a real risk that it is storing up trouble for the future.”
Miller said that this will: “Add to the interest burden once the holiday period is over and that will place some borrowers under real strain, especially those that were already struggling with arrears prior to the current crisis.”
He added: “We’ve all had that back-to-work feeling after a long holiday. For borrowers enjoying an extended mortgage holiday, this could be much worse than that.”
The full story from The Times can be read here (paywall).