Support for shared owners during the coronavirus crisis

24 July 2020

This update by the NHF and the Building Societies Association (BSA) sets out the support shared owners can expect from their housing association and their mortgage lender during the coronavirus crisis.

Support for shared owners from housing associations

Housing associations are keeping residents – including shared owners – safe and supported in their homes during the coronavirus crisis, keeping vital services running, and helping communities to respond.

They know that many shared owners will be worried about their income. Any shared owners who are concerned should contact their housing association, who will want to help.

During this crisis, housing associations are committed to:

  1. Keeping people secure at home

During this crisis, no shared owner will be evicted from a housing association home as a result of financial hardship caused by coronavirus.

  1. Helping people to get the support they need

Housing associations have teams ready to help shared owners to access benefits and other support to alleviate financial hardship. This support includes:

  • Accessing Universal Credit – which will cover the cost of rent and service charges for shared owners in many circumstances.
  • Accessing other forms of help – for example with paying bills, council tax, and hardship funds.
  • Providing financial advice, help with budgeting, and other types of support to deal with the impact of loss of income.
  1. Acting compassionately and quickly where people are struggling to pay rent

Housing associations are working with shared owners to understand how they can help them. This includes flexibility on when to collect rent and other charges where that would make a difference, and working closely with shared owners to agree an affordable and sustainable repayment plan for any arrears that are built up.

  1. Working with lenders to join up support

Housing associations recognise that many shared owners will also be worrying about how to pay their mortgage and will work closely with lenders to ensure that support for shared owners is joined up.

Support for shared owners from mortgage lenders

Mortgage lenders are supporting homeowners, including shared owners, during these difficult times. The BSA knows that shared owners have experienced financial difficulties because of coronavirus, and are committed to helping them through this period.

If shared owners are worried about paying their mortgage, they should contact their mortgage lender who will be able to help.

During this crisis, mortgage lenders are committed to:

  1. Keeping people in their homes

There is a moratorium on lenders repossess properties, which means homeowners will not lose their homes at their difficult time. This is in place until the end of October.

  1. Helping with costs – mortgage payment holidays

Mortgage lenders have agreed over 1.8 million mortgage payment holidays, or deferrals of up to three months for customers whose finances may have been affected by the coronavirus lockdown. Many of these are shared owners.

Customers who have not yet applied for a payment deferral and are experiencing financial difficulties due to coronavirus will still be eligible to apply until 31 October 2020. Mortgage lenders are providing a further three months full or partial payment deferral if a shared owner needs one.

This is not necessarily the best option for everyone and it will always be in the borrower’s best interests to pay their mortgage if they are able to. If a shared owner is experiencing financial difficulties because of coronavirus then there are a range of other options that mortgage lenders can provide which may help. These include extending the length of the mortgage to reduce monthly payments or switching to another product such as an interest-only one.

  1. Product switches

Lenders’ voluntary agreements are in place so that existing customers may be offered a new mortgage product at the end of their existing deal so that they do not revert onto the reversion rate or SVR (Standard Variable Rate).