Italy to defer mortgage payments due to Coronavirus
Italy’s deputy economy minister Laura Castelli has said that payments on mortgages to individuals and households will be suspended across the whole of Italy due to the Coronavirus outbreak, according to the BBC.
The countries banking lobby group, ABI, has said that lenders would offer debt holidays to small firms and families, as reported by the BBC.
Martin Stewart, founder and director at London Money, believes that it is an interesting and worrying move simultaneously by the Italian authorities.
He said: “They are the proverbial canary down the coalmine of Europe with regard to the Coronavirus, and I find it hard to believe that we are not glimpsing our own fate.
“To coin a phrase, GDP takes the stairs up and the lift down and we could soon be looking at a severe economic downturn if we are all forced to watch daytime television for the next 14 days.
“Unfortunately, the arsenal of weapons that the BoE can deploy has largely been depleted by the credit crunch so if we are to extrapolate the current situation in Italy and juxtapose it with our own destiny then buckle up for what could easily become some of the most amazing central bank interventions we are ever likely to see.”
Mike Brown, director at Crystal Clear Financial Services, outlines that if the UK were to go into a total lockdown, then he believes there would have to be some form of suspension on mortgage payments, loans and credit cards.
He added: “With over a quarter of the country who have no savings at all, having a forced lockdown would tip the balance into a negative position, therefore government intervention would have to be mandatory.
“Equally, if we do nothing and the virus continues to take hold and becoming more difficult to contain, then the longer term ramifications could be catastrophic, so taking dramatic action early on could see the recovery be far quicker and sustainable”
Sarah Tucker, founder at The Mortgage Mum, said that she thinks it is a great show of support to families and small businesses to suggest that mortgage payments will be suspended across the whole of Italy due to the Coronavirus outbreak.
She said: “There will be a huge strain and impact on families that are not able to work, and businesses will suffer with so much of their daily activity being banned, the latest being public gatherings.
“It is impossible to predict how the Coronavirus will continue to affect people, as well as the markets. Already we have seen a dramatic response on the FTSE 100; and it will be interesting to see how the Italian banks will respond, particularly when offering payment holidays unexpectedly.
“I wonder if another approach will prove to be just as effective for families and small businesses, such as what the American Government are suggesting with regards to a payroll tax cut.”