# Britain urges banks to offer mortgage flexibility in cost-of-living crisis Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-12-07 Category: BANKING Category URL: https://financedigest.com/category/banking Meta Title: Britain Urges Banks to Help Mortgage Borrowers Amid Cost of Meta Description: Finance minister Jeremy Hunt urges banks to assist struggling mortgage borrowers during economic challenges. Lenders agree to offer support options. URL: https://financedigest.com/britain-urges-banks-to-offer-mortgage-flexibility-in-cost-of-living-crisishtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2022-12-07t194107z2lynxmpeib60x4rtroptp4britain-banks-regulator-1736814750496-compressed.jpg) By Huw Jones and Iain Withers LONDON (Reuters) -Britain has called on banks to support households finding it difficult to make payments on mortgages during the cost of living crisis. Finance minister Jeremy Hunt told banking bosses at a meeting on Wednesday he expected them to help borrowers, while the Financial Conduct Authority laid out options the regulator said lenders should adopt to ease the strain. We expect every lender to [live up to their responsibilities](https://www.financedigest.com/indefensible-uks-sunak-under-fire-over-response-to-cost-of-living-crisis.html "‘Indefensible’: UK’s Sunak under fire over response to cost of living crisis") and support any mortgage borrowers who are finding it tough right now,” Hunt said in a statement after the meeting. Attendees included NatWest Chief Executive Alison Rose, Nationwide CEO Debbie Crosbie, HSBC UK CEO Ian Stuart, Lloyds CEO of [consumer lending](https://www.financedigest.com/equiniti-credit-services-investigates-consumer-attitudes-to-lending-in-new-report.html "Equiniti Credit Services investigates consumer attitudes to lending in new report") Jasjyot Singh, consumer campaigner Martin Lewis and FCA Chairman Richard Lloyd. The lenders agreed to [offer support such as switching to cheaper fixed rates without a new affordability test](https://www.financedigest.com/spain-offers-to-pay-companies-testing-a-4-day-work-week.html "Spain offers to pay companies testing a 4-day work week"), extending a loan or lowering monthly payments, the finance ministry said. The FCA, in draft guidance on Wednesday, also laid out similar options it said [banks should offer customers](https://www.financedigest.com/communicating-with-the-customer-is-the-future-of-mobile-banking.html "Communicating with the customer is the future of mobile banking"). However, the proposals stopped short of the forbearance package offered to borrowers in [COVID-19 pandemic](https://www.financedigest.com/lessons-that-banks-and-financial-institutions-need-to-take-from-the-covid-19-pandemic.html "Lessons that Banks and Financial Institutions need to take from the Covid-19 Pandemic") lockdowns, which included widespread payment holidays. Britain is facing an economic crunch that official budget forecasters predict could mean households face a [record hit](https://www.financedigest.com/uk-shop-price-inflation-hits-record-8-in-january-brc-2.html "UK shop price inflation hits record 8% in January: BRC") to living standards over the next two years. Political turmoil in Britain under the short-lived premiership of Liz Truss also forced up the cost of borrowing and led lenders to [hike mortgage rates](https://www.financedigest.com/central-banks-hike-rates-again-but-a-pause-is-coming.html "Central banks hike rates again, but a pause is coming"), although some have edged down since markets calmed under Prime Minister Rishi Sunak. After years of rising [house prices](https://www.financedigest.com/uk-house-prices-stabilise-after-four-month-fall-halifax-says.html "UK house prices stabilise after four-month fall, Halifax says"), signs of strain are starting to appear in the housing market. [Prices slid last month by the most since the global financial crisis](https://www.financedigest.com/biggest-uk-house-price-fall-recorded-since-financial-crisis.html "Biggest UK house price fall recorded since financial crisis"), mortgage lender Halifax said on Wednesday. In its draft guidance, the FCA also said firms may offer payment concessions, adding that lenders did not have to reassess affordability when [changing a mortgage contract](https://www.financedigest.com/the-antibodies-contract-manufacturing-market-to-see-through-the-probable-sea-change-through-digitization.html "The Antibodies Contract Manufacturing Market to see through the probable sea change through digitization") to reflect forbearance. The FCA [announced a short public](https://www.financedigest.com/infinidat-announces-public-cloud-and-data-protection-product-lines.html "INFINIDAT Announces Public Cloud And Data Protection Product Lines") consultation on the guidance until Dec. 21. Firms may offer a range of contract variations to support borrowers who would like to reduce their monthly payments, and our rules allow this regardless of whether [customers are facing](https://www.financedigest.com/talk-to-me-the-changing-face-of-customer-communications.html "TALK TO ME :THE CHANGING FACE OF CUSTOMER COMMUNICATIONS") payment difficulties,” the FCA said. We will [consider if there are further steps we can take to help firms](https://www.financedigest.com/pizza-firm-dp-eurasia-considers-divestment-of-russian-business.html "Pizza firm DP Eurasia considers divestment of Russian business") to support their borrowers, including at scale. (Reporting by Huw Jones and Iain Withers; Editing by Carolyn Cohn, David Evans, Nick Macfie and Richard Chang) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---