CONSERVATIVE MP for Harlow, Robert Halfon, welcomes the deal struck by the Chancellor today announcing new support measures for mortgage holders. Halfon tells Your Harlow, “Many residents have written to me over the past few days expressing their concern about their mortgage payments. The measures announced today will offer comfort to those who are anxious and support for those who do get into difficulty.”

This morning the Chancellor met the UK’s principal mortgage lenders and the Financial Conduct Authority (FCA) to agree support for people struggling with mortgage repayments. The lenders – which cover over 75% of the market – agreed to a new mortgage charter which means:

1. Anyone worried about their mortgage repayments can call their lender for information and support, without any impact on their credit score.
2. Customers won’t be forced to have their homes repossessed within 12 months from their first missed payment.
3. Customers approaching the end of a fixed rate deal will be offered the chance to lock in a deal up to six months ahead. They will also be able to apply for a better deal right up until their new term starts, if one is available.
4. A new agreement between lenders, the FCA and the government permitting customers to switch to an interest-only mortgage for six months, or extend their mortgage term to reduce their monthly payments and switch back to their original term within the first six months, if they choose to. Both options can be taken without a new affordability check or affecting their credit score.
5. Support for customers who are up-to-date with payments to switch to a new mortgage deal at the end of their existing fixed rate deal without another affordability check.
6. Offer tailored support for anyone struggling and deploy highly trained staff to help customers. This could mean extending their term to reduce their payments, offering a switch to interest only payments, but also a range of other options like a temporary payment deferral or part interest-part repayment. The right option will depend on the customer’s circumstances.

Commenting on the announcement, Mr Halfon said:

“This is welcome news for many residents across Harlow. The unprecedented rise in mortgage rates have caused a great deal of worry for people and I am pleased that today’s announcement will provide comfort to those who are anxious about their future payments, and support for those who need it. The rise in interest rates announced by the Bank of England yesterday is intended to help bring down inflation, but it must not cause unintended consequences for those struggling with the cost of living. 

“I welcome the agreement made by the Chancellor, and the flexible measures included in the new charter will go a long way to help Harlow residents. This comes on top of the additional support packages that have been announced to help people struggling with the cost of living, including an average £3,000 per household to help people with their energy bills.

“I encourage anyone who is worried to contact their bank, or lender, who are there to help and who can provide them with information and support without any impact on their credit score. My priority will be to continue to work with the Government to ensure Harlow residents are supported as we face the challenges ahead.”

The Chancellor of the Exchequer, Jeremy Hunt, said:

“There are two groups of people that we are particularly worried about. The first are people who are at real risk of losing their homes because they fall behind in their mortgage payments. And the second are people who are having to change their mortgage because their fixed rate comes to an end, and they’re worried about the impact on their family finances of higher mortgage rates.

“So today I agreed with the banks and the principal mortgage lenders and the Financial Conduct Authority three very important things.

“The first is that absolutely anyone can talk to their bank or their mortgage lender and it will have no impact whatsoever on their credit score.

“The second is that if you are anxious about the impact on your family finances and you change your mortgage to interest only or you extend the term of your mortgage and you want to go back to your original mortgage deal, within six months, you can do so, no questions asked and no impact on your credit score. That gives people a powerful new tool for managing their monthly budgets – and it will begin taking effect within the next two weeks.

“And finally for people who are at risk of losing their home in that extreme situation, the banks and mortgage lenders have a number of things in place. The last thing that they want to do is repossess a home, but in that extreme situation they have agreed there will be a minimum 12 month period before there’s a repossession without consent.

“Tackling high inflation is the Prime Minister and my number one priority. We are absolutely committed to supporting the Bank of England to do what it takes. We know the pressure that families are feeling. That’s why we’ve introduced big support packages around £3,000 for the average household this year and last.

“But we will do what it takes, and we won’t flinch in our resolve because we know that getting rid of high inflation from our economy is the only way that we can ultimately relieve pressure on family finances and on businesses.”

Martin Lewis, founder of MoneySavingExpert.com said:

“The unprecedented steep rise in mortgage rates is causing a nightmare for many with variable mortgages and those coming off fixes. Therefore, the most important thing we can focus on right now is appropriate, flexible forbearance measures. While the Bank of England’s aim is intended to squeeze people’s disposable incomes, no one wants people’s lives to be ruined by arrears and repossessions – and that is the urgent protection we need to focus on.

“I met the Chancellor on Wednesday and reiterated that the minimum we needed was to ensure that when people asked for help from lenders, they knew that if things changed, it wouldn’t be detrimental to their financial situation and their credit scores would be protected as much as possible.

“I’m pleased to see it looks like the Chancellor has listened and those measures are going to be put in practice by the banks. We need to make sure everybody knows their rights if they are in trouble with their mortgage, so they can feel comfortable speaking with their lender and understand the measures that they can request for help.”