Mortgage holders to get 12 - month grace period before repossessions

After the rise of the base rate to 5%, Mr Hunt met with leaders of financial institutions including Lloyds, NatWest, Barclays and Virgin Money.

They agreed that the repossession break should be introduced - similar to the one implemented during COVID.

Mr Hunt spoke after the Downing Street summit about an option for people to go to their banks or lenders and speak about their options, if they are struggling with repayments, without it having an impact on their credit rating - although this had been mentioned as early as March this year by the Financial Conduct Authority (FCA).

He said that people who change the length of their repayment term or go on to interest-only plans can reverse their decision within six months without it impacting their credit rating.

The chancellor said: "There are two groups of people that we're 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 finance since the higher mortgage rates."


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CAUTION: The above-mentioned write-up is extracted from various professional journals and articles including HMRC guidance notes where appropriate.