Lenders have provided more than 1.2 million mortgage payment holidays to households whose finances have been impacted by Covid-19, UK Finance has revealed.
The figures were published as a separate study, from mortgage technology provider Mortgage Brain, showed that lenders have now pulled nearly half of all mortgages from the market.
UK Finance said lenders’ moves to support customers with temporary relief means one in nine mortgages in the UK are now subject to a payment holiday. For the average mortgage holder, the temporary freeze amounts to £260 per month of suspended interest payments, or £775 for a capital and interest mortgage, with many benefitting from the option of extending the scheme for up to three months.
The number of mortgage payment holidays in place more than tripled in the two weeks between March 25 and April 8, growing from just over 392,000 a little over to 1.2 million. UK Finance said there had been an increase of nearly 850,000, or an average of around 61,000 being granted by lenders each day.
UK Finance chief executive Stephen Jones said: “Mortgage lenders have been working tirelessly to help homeowners get through this challenging period. The industry has pulled out all the stops in recent weeks to give an unprecedented number of customers a payment holiday, and we stand ready to help more over the coming months.”
Robin Fieth, chief executive of the Building Societies Association, said: “We know that this is a difficult time for many homeowners; building society staff have been working hard to offer individuals the right solution.”
In a study also published today (April 14), Mortgage Brain stated that last week there were 7,477 products available. This is 7,179 (49.1 percent) lower than the nine-week average to March 16.
Mortgage Brain said the reduction is a result of lenders continuing to reduce, amend or remove products.
Mark Lofthouse, chief executive at Mortgage Brain, said: “The figures from last week show a further massive reduction on products available from lenders but the reduction in the number of changes suggests that we could be reaching the new normal level in these abnormal times.”
In recent weeks Credit Strategy has reported that a third of mortgage products had been pulled from the market, while the government also urged home movers to delay. Some housing market experts now believe house prices could drop three percent this year.