Mortgage holidays taken by one in six homeowners during lockdown

One in six homeowners have been forced to take mortgage holidays because they have been unable to keep up their monthly repayments during lockdown.

Nearly two million mortgage payment holidays have been taken by borrowers in the past three months, according to banking lobby group UK Finance.

An average of £755 has been deferred by 1.9million borrowers each month, up from 1.8million last month.

Banks have been required to offer payment breaks to customers who are struggling financially because of coronavirus since the nationwide lockdown began in March.

Originally intended to offer homeowners a three-month break from repayments, the Government scheme was extended a further three months in late May. 

Eric Leenders, of UK Finance, told The Telegraph: ‘Lenders understand that many households will continue to see their finances squeezed as the pandemic continues, and we are working hard to ensure everyone gets the support suited to their needs.

‘The industry has a clear plan to help homeowners get through these tough times.

‘While it is best for customers to restart their payments if they can, where this is not possible lenders are keen to help, whatever a customer’s financial situation.’

People who have contracted the virus or have seen their income fall because of its economic impact are eligible for a mortgage break.

Many who initially applied in March are coming to the end of their three-month break and banks are encouraging customers to resume payments if possible.

But borrowers in the most financial difficulty can extend their repayment break for a further three months.

There is also a deadline of October 31 for applying for an initial repayment break.

UK Finance also said banks have offered 962,000 credit card payment deferrals and 689,000 breaks to personal loan customers during the pandemic.