Mortgage holders will get a 12-month grace period before banks begin repossessions on their homes, Jeremy Hunt has announced, after a crunch meeting with lenders at No11.
The Chancellor said ministers were “particularly worried” about people falling behind on payments or having to switch deals at the end of a fixed rate mortgage.
He announced measures agreed with banks to cool simmering inflation and a growing interest rates crisis, including a 12-month ban on repossessions.
After summoning lenders including Barclays, Lloyds, HSBC, Natwest and Santander for crunch talks this morning, Hunt told broadcasters the banks had agreed to three “very important things”.
Borrowers will be able to talk to their bank or lender with “no impact whatsoever” on their credit score, he said.
While anyone who switches to interest-only or extends their mortgage term, will be able to switch back within six months with “no questions asked” and no effect on their credit score.
Hunt said he thought the move would “give people a lot of comfort and stop people worrying about conversations with their banks when they are worried about their financial situation”.
And mortgage holders who are at risk of losing their homes will have a “minimum 12-month period before there’s a repossession without consent,” he added.
The Chancellor and former health secretary also pledged that tackling inflation was he and prime minister Rishi Sunak’s “number one priority”.
He said: “We are absolutely committed to supporting the Bank of England in doing what it takes. We know the pressure that families are feeling.
“We will do what it takes and we won’t flinch in our resolve because we know that getting rid of high inflation from our economy is the only way that we can ultimately relieve pressure on family finances and on businesses.”