LENDERS GRANT 1.6 MILLION PAYMENT HOLIDAYS TO MORTGAGE HOLDERS

Lenders have given over 1.6 million mortgage payment holidays as of Friday 24 April to support customers facing financial difficulties due to coronavirus, UK Finance reveals today. One in seven mortgages are now covered by payment holidays following steps taken by lenders to help households whose finances have been affected by the Covid-19 crisis. For the average mortgage holder, the payment holiday amounts to £755 per month of suspended payments.

Further to an industry agreement announced in July 2018, lenders have also announced additional help for homeowners on payment holidays or for those who have been furloughed. Normally customers on payment holidays would not qualify for a product transfer, but given the current exceptional circumstances lenders are waiving this rule to help borrowers impacted by Covid-19. Product transfers are for like-for-like mortgages and tend not to require a new affordability assessment, meaning existing borrowers who have been furloughed will also be eligible.

Stephen Jones, Chief Executive of UK Finance, said:

?Lenders understand that many households are seeing their finances squeezed due to the coronavirus pandemic and we are working hard to help customers get through these tough times.

?The industry has acted quickly to support homeowners through this crisis and has taken decisive steps to ensure that eligible customers on payment holidays due to Covid-19 can opt for the security of fixing their monthly mortgage payments going forward.

?There is a range of support available to mortgage holders concerned about their finances. We would encourage any homeowners impacted by coronavirus to visit their lender's website in the first instance to find out more information and how to apply.?

CHANCELLOR ANNOUNCES ?BOUNCE BACK? LOANS SCHEME TO SUPPORT SMALL BUSINESSES

The chancellor Rishi Sunak has announced a new scheme to provide loans of up to £50,000 to small businesses impacted by the coronavirus pandemic (The Times, £, p2). Under the Bounce Back Loans scheme, due to launch on Monday 4 May, the government will provide lenders with a 100 per cent guarantee for the loan and pay any fees and interest for the first 12 months (BBC News). The chancellor said the scheme would help bolster the existing package of support available to the smallest businesses.

The government also announced changes to the existing Coronavirus Business Interruption Loan Scheme (CBILS) to ensure that lenders have the confidence they need to process finance applications quickly, including by changing viability tests so that banks only need to assess whether a business was viable before the pandemic (CityAM, online only).

Responding to the announcement, UK Finance issued the following joint statement on behalf of the seven largest SME lenders:

?Government, banks and regulators all agree that we have a shared responsibility to take all measures possible to get relief to businesses and we are working towards this goal. The reforms to CBILS announced by the British Business Bank and HM Treasury with the support of the regulators provide welcome changes that should enable banks to provide finance to businesses more quickly alongside other forms of support including capital repayment holidays.

?Lenders are working hard to ensure we provide support swiftly and responsibly and we will continue to work closely with customers to help them identify the finance that is right for their business and financial circumstances. Following the changes to the scheme announced today lenders will only ask businesses for information and data they might reasonably be able to provide at speed and we will not require the provision of forward-looking financial information or business plans from businesses applying for CBILS-backed lending, relying instead on our own information to assess credit and business viability.

?Frontline staff have been working tirelessly to get money to those viable businesses that need help and we stand ready to support many more customers in the weeks ahead.?

NEWS IN BRIEF

A total of 373,000 property transactions in the UK are currently on hold, amounting to £82 billion in sales, according to research by the property website Zoopla (Financial Times, £, online only).

Valdis Dombrovskis, the EU Commissioner for financial services, is expected to announce changes to the way that eurozone banks calculate their leverage ratio to help ensure continued lending during the pandemic, reports Reuters.

Britain's spy agencies must step up their use of artificial intelligence in order to ?keep pace? with adversaries who will exploit new technologies to launch cyber-attacks on the UK, according to a report by the Royal United Services Institute (Rusi) think tank (Financial Times, £, p3).

Michael Gove, chancellor of the Duchy of Lancaster, has told MPs that concluding negotiations with the EU on a post-Brexit trade deal by the end of 2020 is ?entirely possible?  despite the impact of the Covid-19 pandemic (The Times, £, p18).

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Jackie Bennett writes about how the mortgages industry is helping customers impacted by Covid-19 to easily switch to a new deal when they reach the end of their term.