15:34 PM, 8th December 2022, About 2 months ago 4
Homeowners struggling to pay their mortgage bills will be able to switch to interest-only deals without a formal repayment plan under new plans to help borrowers through the cost of living crisis.
The planned FCA guidance advises lenders to let homeowners at risk of payment shortfalls switch to an interest-only loan without an agreed repayment strategy. Borrowers will also be able to extend the terms of their mortgage payments without an affordability assessment and extend the mortgage term up to their retirement age.
I believe this will suppress the number of repossessed houses hitting the market, and may even lead to a number of properties which have recently been listed by owners worried about the affordability of their monthly payments, being taken back off-market as owners realise their monthly payments could now end up back at what they were pre base-rate rises.
I believe this is important news for landlords as fewer properties will be going on estate agent’s books and also fewer sales of repossessed properties at auctions, therefore keeping short-term prices stable, followed by significant growth over the long term as the government keeps the money printers switched on.
There is no doubt in my mind this is the government’s goal as every time a landlord passes away HMRC get to take a bigger slice of the ever-increasing value of their properties…. unless of course, they have been one of the many thousands smart enough to incorporate into a SmartCo and remove future growth from their personal estate.