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Coronavirus: Safeguarding a roof over your head

Coronavirus: Safeguarding a roof over your head

In uncertain times, being sure that we can shut the door to our home and regroup is more important than ever. But we know that the economic impact of Covid-19 is already huge and that, unaided, our homes could be at risk from the knock-on economic effects of the virus.

In the past two weeks, the government has introduced a huge range of measures designed to help those who may struggle with their housing payments. If you’re worried, already facing hardship, or even if you simply want to be clear on the help available if you need it in the future, here are the protections you need to know about.
These measures apply to everyone in England, Wales, Scotland and Northern Ireland, although the application processes may vary by country and lender.
Mortgage Payments

Homeowners paying off a mortgage currently part with just under a fifth of their income to keep the roof over their head, according to data from Royal London.
To take that pressure off, the government last week announced that homeowners would be able to apply for a three month mortgage payment holiday to temporarily stop or reduce their monthly payments if they are affected by the impact of the virus. (Several lenders already offer this option for existing customers who have been consistently repaying their loan.)

If you are struggling to pay your mortgage, get in touch with your lender as soon as you can – as far in advance of the point that you may be unable to meet your payment as possible. There will be a fast-track approval process in place with quick decisions. The application is not guaranteed to be accepted and there will be implications for the remainder of your mortgage when your payments are due to start up again. Your credit rating should not be affected.
“It’s likely the lender will spread your outstanding payments over the outstanding term of your mortgage, so you will see an increase in your monthly mortgage payments,” says the Money Advice Service. “The shorter the term left on your mortgage, the larger the increase in your monthly payments, once the mortgage payment holiday is over. You should consider the impact this will have on your future financial commitments.

“It’s possible some lenders will consider increasing the length of your mortgage term to help mitigate this. In any case you should speak to your lender or mortgage adviser and ask them to provide an explanation of what this will mean for you and help you understand any other options which may be available to you.”
The powers that be have also confirmed that those who have benefited from a help-to-buy equity loan will be offered interest payment holidays if they are struggling to pay due to coronavirus. 

Tenants and Landlords

It took a couple of days but the government finally confirmed last week that the three month payment holiday would be extended to landlords paying buy-to-let mortgages under the same conditions and via the same application process with their lender. This, the theory goes, will mean they can pass these leniencies on to tenants who may be struggling.

Renters are also now protected from eviction for the next three months at least. That means a landlord cannot legally kick you out for any reason. This includes social housing tenants, private renters and lodgers – anyone who pays rent.
Depending on how the epidemic evolves, this and the other emergency financial announcements may be reviewed with a view to extension as necessary. If you are facing difficulty in paying your rent because of the direct or indirect impact of Coronavirus, keep any evidence of loss of income and discuss the issue with your landlord as soon as you can.

Once you have agreed a way forward, landlords and tenants “will be expected to work together to establish an affordable repayment plan, taking into account tenants’ individual circumstances”, the government states.

Commenting on the news, the housing secretary Robert Jenrick said: “The government is clear – no renter who has lost income due to coronavirus will be forced out of their home, nor will any landlord face unmanageable debts.”
Other housing measures include a freeze on new possession proceedings through applications to the court. The aim is to prevent anyone being forced to leave their home during the crisis. Shelter offers further details and advice on the protections for mortgage payers, renters and landlords.

Council Tax

Local authorities will receive a grant of £500m – split between them – to support economically vulnerable individuals and households.

“We expect most of this funding to be used to provide more council tax relief, either through existing local council tax support schemes or through complementary reliefs,” said Mr Jenrick.
In other words, as it currently stands, most households will need to keep paying their council tax as usual. This may change as the situation and the economic impact becomes clear in the coming days and weeks, and the local authority of each council will decide what, if any, help will be available for residents.

Some have already indicated that they won’t pursue enforcement or legal action if residents can’t pay, but no assumptions should be made. Again, if you are struggling to meet payments, contact your local authority as soon as possible to discuss the matter.

Some have explicitly said they won’t take enforcement action for those who are unable to pay the council tax bill during the outbreak, but don’t assume that includes your own. Check to see what specific statements your local council has made about its plans for council tax payments and arrears during this period.
Energy Bills

Although it was underreported compared with the headline announcements last week, the government also launched an emergency package with energy suppliers to ensure consumers – many of whom will see their energy bills rise significantly because they are now staying at home – don’t face any additional hardships during the outbreak. That could include the ability to review your bill payment or debt repayment plans, taking payment breaks or reducing the amount you pay, giving you more time to pay and, potentially, access to hardship funds.

Ofgem has confirmed that no credit meters will be disconnected during the outbreak. “If you think you can’t afford to pay for any extra gas or electricity used because you’re having to self-isolate at home, support will be available through your energy supplier,” the regulator adds. “Your supplier must take into account how much you can afford, and will explain your options.”

Ofgem provides further general advice on household energy bill support and who to contact if you’re finding it difficult to pay your bills. If you are a business finding it hard to pay your bills, the government has published advice on support for businesses, including available grants.
Scam Warning

It is vital to only use trusted sources of information about the coronavirus, government measures to help you manage your financial affairs, the latest announcements and the financial help available to you.

Scammers are, despicably, using the fast-changing nature of the virus’s public health and financial impacts to defraud people at their most fearful and vulnerable. Accurate and trustworthy information and further sources of help for anyone worried about their financial situation as a result of coronavirus are available from:
Source: 25/03/2020

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Because we play by the book we want to tell you that…

Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
There maybe a fee for mortgage advice of up to 1% of the amount borrowed. A typical fee is £99 but will depend upon your circumstances.

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