24 September 2020
Mortgage and Property Report September 2020
Welcome to the latest edition of Kensington’s Special COVID-19 Update Series. In this edition, we look at the lifecycle of mortgage payment holidays across the industry and specifically in Kensington’s own book.
Following previous analysis (in the second and third editions) of characteristics seen in the loans of borrowers who took mortgage payment holidays, we now re-examine these and look at how these characteristics are linked to customers renewing or exiting their payment deferrals now that payment holiday rates are declining and economic activity is moving closer to normal levels.
- Payment Holiday rates peaked in June, and have been steadily declining over the course of July and August, as more borrowers returned to work and regained their normal income
- The majority of customers in KMC’s book have exited their payment holidays and are generally expected to maintain normal payments going forward
- Those who remain on payment holidays have some characteristics in common, with the clearest drivers being employment industry and the size of their monthly mortgage instalment
- The lasting impact of the crisis on mortgage customers is unlikely to be clear before the end of the year, when all support schemes will have come to an end