MORTGAGE LENDERS SUPPORT EXTENSION TO MORATORIUM ON POSSESSIONS

Further to the FCA's consultation announced today, mortgage lenders support the further extension to the moratorium on possessions to 1 April 2021. The extension will help provide reassurance to both residential and buy-to-let borrowers that they will not have their homes repossessed at this difficult time. The continued support from banks and building societies follows the government's announcement to extend the ban on bailiff activity in England until 21 February 2021, while Wales and Scotland have banned rental evictions until 31 March 2021.

The mortgage industry's continued commitment to the possessions moratorium sits alongside payment deferrals and additional forbearance measures which lenders continue to provide to customers that are struggling with the financial impact of the pandemic. Under the extension, members of UK Finance and the Building Societies Association will agree not to seek, or enforce, a warrant for possession before 1 April 2021, unless there are exceptional circumstances such as a customer requesting proceedings to continue or when the property is in vacant measures. This latest extension means the measures will have been in effect for 12 months by its end date.

Eric Leenders, Managing Director of Personal Finance at UK Finance, said:

The banking and finance industry is committed to providing ongoing support to those facing financial difficulty as a result of the pandemic.

?The industry is fully supportive of a moratorium on possessions remaining in place until 1 April 2021 to ensure customers do not lose their home at this difficult time. This is part of a package of support provided by lenders for those who need it, including payment deferrals and tailored assistance. It is vital that customers who are concerned about their finances go online or contact their lender to understand what options and support are available to them.

UK ECONOMY FACES ?DARKEST HOUR?

The UK economy faces its ?darkest hour?, Andrew Bailey, the governor of the Bank of England, said yesterday, with the current Covid-19 lockdown impacting an economic recovery (The Times, p34, £; Guardian, p31). Speaking at a Scottish Chambers of Commerce online event, Mr Bailey said that the UK is ?in a very difficult period at the moment and there's no question that it's going to delay, probably, the trajectory?. Meanwhile at a separate event, Ben Broadbent, deputy governor for monetary policy, said the UK was in a ?double-dip recession?, with GDP at the end of 2020 expected to have been ?around 10 per cent lower than at the end of 2019'the sharpest decline, through any calendar year, at least since 1920.?

Mr Bailey added that the unemployment rate is probably closer to 6.5 per cent compared to the current 4.9 per cent show in official figures, as individuals need to be actively looking for work to be considered unemployed. The governor also said there are ?a lot of issues? with negative interest rates, although ?in simple economics and maths terms, there is nothing to stop it at all? (Daily Telegraph, B1, £).

TALKS WITH EU TO BEGIN THIS WEEK ON FINANCIAL SERVICES

Discussions between the UK and EU on a memorandum of understanding on financial services will begin this week, the prime minister's spokesman said yesterday (Bloomberg). An agreement is due to be completed by March 2021 on how regulators will cooperate following the end of the transition period. The spokesman said that the government wanted to ?preserve financial stability, market integrity and the protection of investors and consumers?, adding that ?[We] did push for a broader agreement on financial services as part of the negotiations, and the Treasury will continue that work with the commission beginning this week.?

Meanwhile, Catherine McGuinness, policy chair of the City of London Corporation, told City AM that she wants to see 'those important [financial services] sectors?get more of the focus as we go forward?.

NEWS IN BRIEF

The shadow chancellor Anneliese Dodds will give the annual Mais Lecture today in which she will say there is a need for ?a more resilient economy that can only be achieved through responsible economic, fiscal and monetary policy? (Financial Times, p3, £).

Campaigners are calling for an extension of the cut in stamp duty which is due to end on 31 March 2021 (Daily Telegraph, B1, £).

The chancellor Rishi Sunak is planning to establish a new base for the Treasury in the north of England, possibly in Leeds, Newcastle or Teesside, housing up to 750 civil servants, reports the Financial Times (online).

Kwasi Kwarteng, the new business secretary, has set out five priorities for the department including ?relentless business engagement?, ?backing long-term growth and taking advantage of Brexit? and ?levelling up? economic growth, reports The Times (p34, £).