The mortgage break is part of a wider raft of proposed measures aimed at alleviating the financial impact of the pandemic that will include:
* £330bn of loan guarantees to businesses, with more to be made available if needed.
* A 12-month business rates holiday for all shops, pubs, theatres, music venues, restaurants and any other hospitality or leisure business
* Cash grants of £10,000 to 700,000 of the smallest businesses
Commenting on the unfolding crisis, the Chancellor said: "We have never, in peacetime, faced an economic fight like this one.
"I know that people are deeply worried. I know that people's anxiety about the disease itself is matched only by their anxiety about their livelihoods."
Labour leader Jeremy Corbyn urged the government to suspend home rental fees and ban evictions of tenants during the crisis.
As ever, the property industry was quick to react to the news. Here's what they're saying:
Mark Harris, chief executive of mortgage broker SPF Private Clients: "A three-month holiday for mortgage holders who suffer financially as a result of coronavirus will be welcomed by many who have been worried about their jobs and how they will pay the mortgage. There is so much uncertainty that knowing the mortgage, which is most people’s biggest outgoing, will be paid, will remove a significant burden.
"The same is true for those struggling to pay their rent. Speak to your landlord as soon as you can - he or she may be able to apply to their buy-to-let provider for their own payment holiday if otherwise they would struggle to pay their mortgage should you fail to pay the rent.
"Lenders tend to be reasonably sympathetic to any illness that affects a borrower’s ability to pay their mortgage, whether it's coronavirus or something else. They may ask for evidence that you are unwell but the message to borrowers, particularly the self-employed who are most likely to be affected in terms of their income, is that anytime you are struggling to pay your mortgage, get in touch with your lender. Don’t bury your head in the sand and hope the problem will go away - it won’t.
"Some lenders have existing payment holidays of longer than three months so it is worth asking. But remember that as it stands, interest will still be calculated over the period of the payment holiday and then added to the loan along with the repayment part of the payment. The monthly direct debit may then be increased to cover the amount added once you resume your payments.
"The important thing is to ask for help as early as possible rather than ignoring the issue. While lenders should offer support to borrowers, they can only do that if they know there is a problem.
"It is good practice to keep a note of any conversations or correspondence you have with the lender about a payment holiday, as if is not marked down correctly and is noted as arrears, there could be an issue when you come to remortgage in two or three years’ time. But if it is marked correctly, it shouldn’t harm your credit rating.
"Those coming up to remortgage should consider an offset deal, which is a little like a cheap overdraft facility that you can dip in and out as you need it. If you have a £200,000 mortgage and the same amount in savings offset against it, for example, you pay no interest and the real benefit is that you know you have a cash buffer if you can’t work for several months - or longer."
Top tips for negotiating a mortgage holiday:
1: Engage and engage early. Enter into a dialogue with your lender as soon as possible - and preferably before you miss a mortgage payment.
2: Make a record of that dialogue. Don’t just leave a message - talk to them. Keep a record of who you spoke to and when. Email correspondence is probably easiest so you have a trail.
3: Have your mortgage statement to hand - you will need your mortgage account number and details of usual payments.
4: Have evidence demonstrating how you have been affected by coronavirus - this could be a doctor’s note or letter from your employer detailing reduced hours or similar.
Rob Griffiths, Director at the Mortgage Market Alliance: “Mortgage borrowers who wish to accept a mortgage holiday from their lender need to be fully aware of the detail of such an arrangement and what it actually means for their mortgage payments, the length of their term, and how this might appear on their credit file.
"This is not the lender paying the borrower’s mortgage for them for a three-month period but a deferment of these mortgage payments into the future. With that being the case, borrowers should get the detail of any such arrangement and use their mortgage adviser to provide an explanation of what this actually means for them, and to understand what (if any) other options might be available.”
Paresh Raja, CEO of Market Financial Solutions: “This is welcome news and builds on the bold commitments made by the Chancellor in last week’s budget. Mortgage holders struggling to stay on top of their repayments will now have a three-month window to reassess their finances. This announcement could also not come soon enough – the COVID-19 pandemic is posing significant challenges for consumers, investors and businesses alike, with the situation changing every day.
“I hope the Government continues to find ways to support those in need over the coming days and works with the private sector, including lenders, to ensure the necessary support is offered to those facing financial hardships as a result of the coronavirus.”
