Keeping on top of regulatory changes during Covid-19

Influencing factors on the housing and mortgage markets appear with such great frequency that this is no easy task. Even as I sit down to filter through this raft of information, I received a news alert outlining FCA proposals to support mortgage borrowers affected by Covid-19 as a result of increasing restrictions announced in recent weeks. Which seems like a prudent place to start.

The regulator is proposing to extend the availability of payment deferrals to support borrowers who are experiencing payment difficulties because of coronavirus. Under the new rules, those who have not yet had a payment deferral will be eligible for two payment deferrals of up to six months in total.

Those who currently have an initial payment deferral, or who have resumed repayments after an initial payment deferral, will be eligible for another payment deferral of up to three months. Under the FCA’s proposals, borrowers would have until 31st January 2021 to request a payment deferral.

The regulator has also confirmed that a payment deferral under these proposals would not be reported as missed payments on a borrower’s credit file. However, it noted "this does not mean that consumers’ ability to access credit will be unaffected in future, as lenders may take into account a range of information when making lending decisions". The FCA is also proposing that no one will have their home repossessed without their agreement until after 31st January 2021.

These set of proposals comes quickly on the back of confirmation that it will be ‘business as usual’ throughout the housing market during the lockdown period.

In other ‘news’, Chancellor Rishi Sunak has just confirmed that he will extend the furlough scheme until the end of March. The scheme will pay up to 80% of a person's wage up to £2,500 a month and the government is expected to review the policy in January.

The Chancellor has also announced an increase in government support for the self-employed. The taxable grant at the start of November was due to cover 40% of average monthly trading profits. However, following the announcement of another national lockdown, the self-employed will now be able to claim state aid of up to 80% of profits for November. Along with the 40% level of trading profits for December and January, the third grant will cover 55% of trading profits, to a maximum of £5,160.

In addition, businesses will continue to be able to apply to banks for government-backed support loans until 31 January, compared with a previous 30 November deadline for some of the programmes.

Looking further forward, the intermediary market will have to contend with a short interim period between the current Help to Buy scheme ending and the beginning of the new version. From April 2021, the Help to Buy scheme will be limited to only first-time buyers, with regional price caps in place for which properties will qualify for the scheme across different areas of England.

This represents a very brief selection of information which could be relevant for a growing number of your clients. Keeping clients informed remains a key component within the advice process and the quality of this advice will prove integral for many FTBs, homeowners, landlords, investors and developers.

Keeping on top of all these Government and regulatory-led changes is hard enough - and some elements of these might even be outdated by the time you read this - but they do represent important areas which intermediaries need to be aware of. And when you also add the raft of daily product, policy and criteria changes into the mix, then it’s little wonder that a growing number of advisers are turning to specialist distribution partners for additional support during such a frantic and complex period. The needs of borrowers have become far more financially diverse over the course of the pandemic and this is only likely to continue. Meaning that the reliance on the intermediary market to add greater clarity and offer more effective routes to alternative forms of finance where necessary will only intensify as we move into 2021.