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Go easy on homeowners as repossessions re-start looms, regulator warns lenders

But FCA policy chief also warns those on mortgage holidays that they will see their credit profiles adversely affected in the future.

Nigel Lewis

nisha arora repossessions

Lenders have been urged to treat the 1.8 million homeowners who have taken out Covid mortgage holidays fairly as the ban on home repossessions looms at the end of this month.

Nisha Arora, the Director of Consumer and Retail Policy at the Financial Conduct Authority (FCA), told an industry conference yesterday that a majority of those who had signed up for these deferrals had been able to meet the new payment plans, but that a significant number needed more support.

The FCA’s guidance to lenders has been crucial in shoring up the housing market during the crisis, during which it has changed its advice on dealing with struggling mortgage holders three times.

This has helped hundreds of thousands of home owners avoid repossession.


Arora urged lenders to show those still struggling to pay their mortgage to show flexibility in the way they deal with each case, recognise vulnerable customers, and that repossessions should be a last resort.

But she also revealed that those who have taken up a mortgage holiday should expect their credit profiles to be adversely affected “to ensure that lenders have an accurate picture of consumers’ financial circumstances and reduce the risk of unaffordable lending,” she said.

“We have set out that once firms have agreed a repayment arrangement with a customer, they should waive or reduce interest, fees and charges to the extent necessary to prevent the balance from escalating.

“This will help to avoid the debt becoming unmanageable for the customer and make it easier for them to get back on track.”

Read more about repossessions.

October 14, 2020

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