To say govt are under pressure is an understatement

Dale Jannels is managing director at Impact Specialist Finance

To say that the government is currently under a substantial amount of pressure is something of any understatement.

Keeping political points of view or persuasion on the sidelines, the handling of the coronavirus pandemic and Brexit remain huge issues, which are dominating time, resources and attention.

UK Finance: 2.6 million mortgage deferrals have been approved

I fully appreciate the importance of tackling these concerns and the major toll they are having on the health – physically, mentally and financially – of the UK population.

However, there are also a number of other areas, which the government can ill-afford to ignore across the housing and mortgage market.

The problems facing mortgage prisoners are mounting and a recent report from the London School of Economics (LSE) has put the onus and ethical responsibility on the government to solve the mortgage prisoner crisis quickly and recommended a package of measures to do so.

The authors of the report said there is a strong case for a wider variety of solutions, with the choice depending on the policy goal.

While this is typically to reduce mortgage payments, they argued in this situation the overall goal should be reducing harm by preventing defaults, keeping people in their homes and mitigating overall debt problems including other types of debt.

The solutions outlined are – government provided equity loans, partial loan write-offs, mortgage rescue, bringing lenders under the FCA oversight, capping very high standard variable rates on closed books, provide better information, and fund and signpost debt counselling and advice.

Another situation, which is cause for great concern revolves around cladding, and finding appropriate solutions for such deputes should also be high on the government’s agenda.

Through no fault of their own, all too many people continue to find themselves in a position where it is neigh on impossible to sell certain property types or even remortgage them – which is an unacceptable outcome.

This has created a new wave of mortgage prisoners. It represents a difficult situation as many surveyors are, quite rightly, being instructed to ensure that additional safety checks are being made in regard to various construction types and lenders are facing risk issues when it comes to new lending.

Sadly, this means many homeowners are unable to produce sufficient evidence – present or historic – that their property complies with current safety standards. Leaving them in a precarious and highly frustrated state, a state, which must be addressed at the highest level sooner, rather than later.

There are also question marks in the air around whether the government will extend the stamp duty deadline in light of some lending, survey and conveyancing backlogs which are having knock-on effects on a growing number on housing chains. A trend which will only intensify in the coming weeks.

These are just some of the issues facing first-time buyers, existing homeowners and homemovers. In the current economic climate, there are many extra layers of complexity for all those involved in the mortgage journey.

And this really does outline the importance of impartial, independent financial advice when it comes to overcoming a growing number of challenges and ensuring that people have access to the right kinds of financial options to match their current, and future requirements.