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Lenders will offer 12-month grace period before repossessions – reports

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  • 23/06/2023
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Lenders will offer 12-month grace period before repossessions – reports
Mortgage lenders have agreed to give borrowers a 12-month break before repossession proceedings following a meeting with Chancellor Jeremy Hunt (pictured) earlier today, according to a media report.

Earlier today, Hunt met with chief executives of major banks, including Lloyds Banking Group, Nationwide, Natwest and Virgin Money to discuss what further support could be offered to struggling mortgage borrowers.

According to a report in Sky News, another topic of discussion was that borrowers could go to their banks or lenders and talk about options if they are struggling with repayments without it impacting their credit rating.

It continued that Hunt said that people who extend the length of their repayment term or select interest-only plans can switch their decision within six months without an impact on their credit rating.

Figures from StepChange reveal that around seven million mortgage holders are struggling to keep up with their bills.

 

Calls for government to do more

Static inflation and the increasing base rate has also lead to an increase in mortgage pricing, which experts warn could lead to monthly mortgage payments rising dramatically for those coming to end of their fixed rate periods.

Both Hunt and Prime Minister Rishi Sunak ruled out introducing a government scheme, such as a mortgage interest relief scheme at source, arguing that injecting large amounts of cash into the economy could further inflation.

Labour and Liberal Democrats have called on the government to do more to offer support to mortgage borrowers, with the latter urging the government to reverse bank tax cuts and then using that to assist struggling homeowners.

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