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Agency warns landlord clients over virus mortgage holidays

One of London’s largest lettings agencies is warning its landlord clients to only use mortgage payment holidays offered by lenders as a last resort.

Chestertons says there’s a risk that taking advantage of the holiday offer could potentially affect their ability to borrow in the future.

As part of its fight against the Coronavirus, the government has asked all mortgage lenders offer their customers payment holidays and has pledged that this will not affect an individual’s credit score.  


However, Chestertons and its recommended mortgage broker – Springtide Capital – says that the missing payments will still show on an individual’s credit report and there is no way of knowing how banks will view or interpret that information in the medium to long term.

A statement from the agency says: “Every lender uses their own algorithms and underwriters to work out whether or not they want to take the risk of lending to someone. The algorithm and underwriters will look at an applicant’s whole credit report and use certain information to calculate their own credit score, which could be very different to the public credit score available through Experian etc.”

Chestertons gives the examples of having multiple recent addresses or erratic payment history for a phone bill, which may not have a dramatic effect on a credit score but could still affect the lender’s view of the borrower.

A spokesperson for the agency adds: “Payment holidays are crucial for many people whose incomes have been affected by this pandemic and their introduction came as a big relief, but we are aware of many people who are not in any particular financial difficulties making enquiries about them. 

“They often see it as an opportunity to improve their cash liquidity or to get ‘free money’ and have applied to their lenders, unaware of the potential consequences, when in fact switching to interest-only might have been a more appropriate move.“ 

Poll: Should buy to let landlords take advantage of mortgage holidays?


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    The government have given clear instructions to lenders that corona payment holidays should not impact an individual’s credit score in the future. They are not missed payments that would impact on you, they are authorised payment holidays which are fine. It could potentially effect Landlords who are geared up to 75% LTV as you are adding the interest to the loan, which could potentially take you over the maximum LTV with a lot of lenders meaning that unless you can reduce it back down in the future, your options may be more limited.

    PossessionFriendUK PossessionFriend

    Government can NOT instruct private business to do anything, or if it does, its quite ineffective. ( Apart from Govt sequestrating all the PRS properties for 3 months by denying Civil Justice )
    Practically, on the ground, I can tell you of many landlords who have been told by lenders that if they ask for a Mortgage deferment, then don't ever ask them to re-mortgage. Others have such strict deferment criteria, its difficult for landlords to access it.
    Lastly on the Govt's terrible faux Pas which you repeat, of a ' holiday ' - a deferment is NOT a holiday, deferred mortgage payments have to be repaid with interest and are a bad record on credit history - whatever govt. says.
    When you go on holiday , your work isn't waiting for you when you come back !

  • PossessionFriendUK PossessionFriend

    I agree Only as a Last resort, which is why the Question phrased above is ambiguous - some Landlords might HAVE to. !

    S l
    • S l
    • 30 April 2020 21:26 PM

    Landlords might have to because their tenants spot the rent free bit and refused to pay rent on the basis they got no job even though they are still buying take away and movie nights and spending what nots on unneccessity in the house. We are building a nation of fleecing others to get by on luxury, altho many may not be but this had no doubt encourage many others who can pay rent NOT to pay.


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