Nationwide will not repossess homes of those hit by Covid-19 for next 12 months

May 22, 2020 2:15:47 PM

Nationwide will not repossess homes of those hit by Covid-19 for next 12 months

Britain’s biggest building society has pledged not to repossess homes for the next 12 months in cases where borrowers are in arrears because of coronavirus and working to get back on track.

Nationwide Building Society made the announcement as it unveiled a five-point support package to help protect the homes and finances of those who have been hit hard by Covid-19.

It said no Nationwide mortgage member falling into arrears as a result of Covid-19 will lose their home in the next 12 months – until the end of May 2021 – as long as they work with the society to get their finances back on track.

The society also said it will give mortgage holders payment breaks of up to six months if they need it.

People may already be taking a three-month mortgage payment holiday but Nationwide said that new three-month mortgage payment breaks, which could be partial or full, will be available for those who remain in financial difficulty because of coronavirus.

It said there will be cases where a payment break is not in the best interests of someone’s circumstances and in these circumstances, Nationwide will suggest alternatives.

The new payment breaks will be available via the society’s online coronavirus support page from mid-June.

All Nationwide payment breaks will continue to accrue interest – so borrowers will need to consider carefully whether this is right for them.

The Financial Conduct Authority (FCA) proposed on Friday that borrowers across the industry who are taking a three-month mortgage payment holiday will be able to extend it for another three months.

The FCA’s industry guidance will be finalised after a brief period to allow feedback.

Nationwide commissioned research which found a fifth (21%) of home owners are worried they will not be able to keep paying their mortgage, while 14% fear they will lose their home.

Joe Garner, Nationwide’s chief executive, said: “There is a real need to reassure people, particularly those on mortgage payment breaks who are worried what will happen next.

“At a time when people are concerned about their jobs, bills and health, we want to do everything possible to ensure they don’t worry about having a roof over their heads.”

The five points of Nationwide’s “home support package” are:

1. No mortgage member will lose the property in which they live if they are in arrears as a result of Covid-19 and work with the society to get their finances back on track. Nationwide will protect homes in this way until the end of May 2021.

2. Flexibility for customers in meeting their mortgage payments where they can. This could include temporarily moving to interest-only payments to minimise the long-term impact on their finances.

3. New three-month mortgage payment breaks for those still in financial difficulty due to Covid-19. This would mean a total of up to six months’ support, following an assessment.

4. Encouraging landlords to pass on payment breaks to tenants. Nationwide said it is contacting all its buy-to-let landlord customers to let them know that if their tenants require a rent payment break due to the impact of Covid-19, they can have a mortgage payment break on the property.

5. A bigger focus on housing advice and support, involving a partnership between Nationwide and housing charity Shelter.

Polly Neate, chief executive of Shelter, said the charity is grateful for Nationwide’s support, adding: “Our emergency helpline has already seen a sharp rise in calls from people dealing with a wide range of housing and homelessness problems related to Covid-19.”