The Chancellor has extended the three-month mortgage holiday to buy-to-let landlords if tenants cannot pay rent due to Coronavirus.

Emergency legislation introduced by the government will allow homeowners affected by Coronavirus (Covid-19) pandemic to have a three-months mortgage payment holiday which has been extended to buy-to-let landlords.

Renters have been given protection from the government and cannot be evicted so if they are unable to pay rent, landlords can receive the same mortgage holiday to ease pressure on their finances.

Robert Jenrick the housing secretary said, the government is clear – no renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts.

How do mortgage holidays work?

The scheme is aimed at homeowners such as first time buyers, home movers and remortgage buyers that are up to date with payments, in financial difficulty and have been impacted by Covid-19.

During the Coronavirus crisis the regulator has instructed banks and building societies not to repossess homes or charge fees for the payment holidays.

This also covers tenants in both private and social rented accommodation that cannot pay their rent by speaking to their landlord to arrange the payment holiday.

This does not mean they no longer have to pay rent and after the three-month period arrangements with the landlord to agree a repayment plan over time.

Protection for private landlords is necessary to avoid debts due to lack of rental income with the deferred amounts repaid and interest will continue to accrue on the mortgage.

This does not apply to equity release buyers and they can arrange a lifetime mortgage with the intention of not making repayments receiving cash for under-floor heating, restore period features or gift to a family member.

Help to Buy homeowners included

The government has adopted the mortgage payment holiday approach for Help to Buy homeowners relating to any interest payments on the Equity Loans.

Will German, Director at Homes England said, like other lenders, we will offer payment holidays for those who are struggling to pay interest fees on their equity loans.

Help to Buy is available for both first time buyers and home movers pay a 5% deposit with the government lending up to 20% with a mortgage of 75% or in London up to 40% and a mortgage of 55%.

Only new-build homes qualify with purchase prices up to £600,000 using an Equity Loan interest free for five years, thereafter interest is 1.75% increasing each year by the Retail Price Index plus 1%.

What are your next steps?

Call our LCM mortgage brokers if you are a buy-to-let landlord with a property, remortgaging and want the best mortgage deal, buying your first home or you are planning to move home.

For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your home to pay university fees for grandchildren or even buy a more expensive home.

Start with a free mortgage quote or call us and we can take your details. Learn more by using the mortgage cost calculators, property value tracker chart and equity release calculator.