Nationwide Building Society has pledged to suspend repossessions of borrower’s homes for the next 12 months as part of a packet of measures to support customers. Nationwide says it will offer borrowers flexibility around repayments, which may include temporarily moving onto interest-only.
The lender has announced a five-point support package designed to help protect the homes and finances of those who have been hit hard by Covid-19. The Society is offering extended support for people still financially impacted by the outbreak and who may be coming to the end of an initial three-month mortgage payment support period, which begin to expire next month.
The Society says it welcomes the announcement from the Prudential Regulation Authority and proposal from the Financial Conduct Authority that give clarity on how the sector can best support those who continue to be impacted financially due to the outbreak. The Society’s plans may be adapted to reflect final guidance in the coming weeks.
Nationwide has put in place a range of options to help prevent those still impacted from falling into significant difficulties, whether homeowners or renters, which will be available from mid-June. In addition to three-month payment breaks for both residential and Buy-to-Let mortgages, the Society is also enabling partial payments such as temporary interest only arrangements. In addition, no Nationwide mortgage member falling into arrears as a result of Covid-19 will lose their home in the next 12 months – until the end of May 2021 – as long as they work with the Society to get their finances back on track.
The package, which builds on the Society’s earlier payment support, comes at a critical time and shows that like all building societies, Nationwide is fully focused on helping keep people in their homes at this time. National YouGov research1 commissioned by Nationwide shows more than a fifth (21%) of homeowners are worried they will not be able to keep paying their mortgage, while 14 per cent fear they will lose their home. Worries are even higher for renters, with more than a quarter (27%) concerned that they won’t be able to meet their rent payments, while 18 per cent worry that they’ll lose their home. Close to three quarters (73%) of people are worried that there will be a recession.
The five points of the Home Support Package are:
1. Commitment not to repossess any homes over the next 12 months: No mortgage member will lose the property in which they live if they are in arrears as a result of Covid-19 and work with the Society to get their finances back on track. Nationwide will protect homes in this way until the end of May 2021.
2. Option to change the way people pay their mortgages: Nationwide is offering flexibility for members in meeting their mortgage payments where they can. Assessments will ensure the best outcome, and timeframe, for people’s circumstances. This could include temporarily moving to interest only payments to minimise the long-term impact on their finances.
3. New three-month mortgage payment breaks for those still in financial difficulty due to Covid-19: This would mean a total of up to six months’ support to those most needing it, following an assessment to ensure the hardest-hit customers receive additional support. There will be cases where a payment break is not in the best interests of someone’s circumstances. In these cases, Nationwide will suggest alternatives.
4. Encouraging landlords to pass on payment breaks to tenants: Nationwide is contacting all its Buy-to-let landlord customers to let them know that if their tenants require a rent payment break due to the impact of Covid-19, they can have a mortgage payment break (This link will open in a new window) on the property. This is to ensure benefits are passed on in a way that is fair and helpful to both landlords and tenants.
5. Greater focus on housing advice and support: Through Nationwide’s longstanding partnership with Shelter, the Society will fund more advisers for the charity’s Helpline and HelplinePlus services, which provide specialist advice to those with housing, debt and welfare issues.
Nationwide says it will also support the introduction of new Shelter community engagement officers, who will provide community outreach for those people that struggle to access support. The charity will this year also receive a goodwill gesture as the Society’s Chairman and Non-Executive Directors voted to donate 20 per cent of their net fees to Shelter from June to December.
New payment breaks – partial or full – will be available via the Society’s online coronavirus support page from mid-June. Members already receiving payment support will be contacted prior to it ending and directed online should they require further support due to ongoing financial difficulties as a result of Covid-19. All payment breaks will continue to accrue interest.
Joe Garner, Nationwide’s Chief Executive, said “There is a real need to reassure people, particularly those on mortgage payment breaks who are worried what will happen next. At a time when people are concerned about their jobs, bills and health, we want to do everything possible to ensure they don’t worry about having a roof over their heads. As a mutual, founded to help people into a home of their own, this is what building societies have always been about. We hope this additional support will provide extra flexibility to those who most need it, to help get them back on track.”
Nationwide is also asking the government to consider changes to the way housing support is provided, asking that Local Housing Allowance covers the 50th percentile of rents in any given area rather than the current 30th percentile, something Shelter and the Money Advice Trust have also called for, while also working with government and other organisations to establish a more consistent and customer-focused approach to debt collection and recoveries.
Polly Neate, chief executive of Shelter, said “Nationwide has been supporting Shelter in its fight against bad housing and homelessness for nearly 20 years now, and we are hugely grateful for their generous donation today, which will help to keep our essential frontline services going when they are needed most.”
“Our emergency helpline has already seen a sharp rise in calls from people dealing with a wide range of housing and homelessness problems related to Covid-19. We’ve heard from renters who’ve suddenly lost their jobs and cannot make ends meet, to frightened families stuck sofa-surfing when they should be safe at home.”
“Nationwide’s vital funding, which includes an extra donation from the Society’s Chairman and Non-Executive Directors, means we can continue to be there for as many people as possible at this challenging time. It will help us to increase the number of expert advisers trained to work on our emergency helpline, and it will also give us the chance to reach out to local communities so that renters can become better informed about their rights.”