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Chancellor meets mortgage lenders to hash out cost of living support

Nick Cheek
Written By:
Nick Cheek

Chancellor Jeremy Hunt (pictured) met with major mortgage lenders, the financial watchdog the Financial Conduct Authority (FCA) and Money Saving Expert’s Martin Lewis to discuss actions that can be taken to support people struggling to pay their mortgage.

Banks at the meeting yesterday included Nationwide, Virgin Money, Barclays, Santander, Natwest, Lloyd Banking Group and HSBC.

Lenders agreed that they would allow customers who are up to date with payments to switch to a new competitive mortgage deal without another affordability test and provide information to help customers plan ahead when their rate ends.

They also said they would offer “tailored support” to those who start to struggle with payments, and whilst this would vary by lender could include extending the mortgage term to lower monthly payments or accepting interest-only payments for a period.

Lenders also said that they would ensure “highly trained and experienced staff” are on hand to help.

The government confirmed it would take action to make Support for Mortgage Interest easier to access as well as funding for the Money and Pensions Service to provide debt advice in England.

The FCA added that it had opened a consultation on draft guidance to clarify how lenders can support borrowers with the rising cost of living and had outlined information for borrowers on options and support available.

Lenders, FCA and govt to ‘continue to work closely’

The Treasury said that mortgage lenders, the FCA and the government would “continue working closely together to ensure that the mortgage market works well for all homeowners, in particular those facing financial difficulty”.

It added that discussions would also continue to take place with lenders on “what more they are able to do to inform and support their customers going forward”.

Lewis said that the “major concern” for people’s mortgages and the knock-on impact on rents was rising interest rates, energy prices and cost of living in the spring next year.

He continued: “So, the most important thing is that now the conversations have started about what flexibility and forbearance measures can be put in place to help those struggling.

“The commitments today set a good direction, and after helpful conversations I’m hopeful that further progress will be made. For those worried about making mortgage repayments, the sooner you communicate with your lender the better.”