Updated guidance for firms has been announced by the FCA
Financial Conduct Authority
On 27 January 2021 the FCA published final revised guidance for firms titled “Mortgages and Coronavirus: Tailored Support Guidance January 2021”. This applies across the United Kingdom.
In short, mortgage lenders may pursue possession proceedings in appropriate cases, but may not undertake evictions before 1 April 2021:
- The guidance states that mortgage lenders should not, absent exceptional circumstances (such as a customer requesting that the proceedings continue), enforce repossession and should not seek, or enforce, a warrant for possession or a warrant of restitution before 1 April 2021. This is, in effect, a 2 month extension to the prohibition on evictions.
- The guidance confirms that lenders may commence or re-commence and continue repossession proceedings, up to and including obtaining a possession order, as long as they act in accordance with the FCA guidance, MCOB 13, and applicable pre-action protocols.
The FCA position goes further than legislative requirements which ban certain types of evictions in England and Wales and Scotland.
England & Wales
On 29 January 2021 the Ministry of Justice updated Practice Direction 55C Coronavirus: Temporary Provision in Relation to Possession Proceedings. At the time of writing, there has been no explanatory note or press release. From our analysis, the key changes are:
- Four month extension of the "interim period” to 30 July 2021 during which time the temporary provisions are applicable to Part 55 possession claims, whether new claims or stayed claims.
- Three month extension to the date by which a “reactivation notice” must be filed and served, to 4pm on 30 April 2021. This concerns claims that were automatically stayed due to the pandemic.
On 29 January COVID – 19 Guidance, Chancery Master’s Court Order 88 was published. The Order confirms that the key change to the previous guidance published in October 2020 is that the Master has extended the timeline for filing a Reactivation Notice until 4pm on Friday 30 June 2021.
There are no current changes to the procedural rules and no requirement to file a reactivation notice. Although note that the FCA requirements (above) apply to Scotland and limit the ability of lenders to enforce possession orders.
The changes summarised above are not unexpected in light of the extension to lockdowns across the UK. The substantive changes relate only to deadlines for filing information in proceedings and a ban on evictions.
Importantly, across the UK mortgage lenders are able to commence and pursue possession proceedings in appropriate cases and we are seeing lenders begin to take action on a case by case basis. We would endorse this proactive approach to managing customer accounts that may be in long term difficulty, whilst taking enhanced steps to engage with customers, particularly around the impact the pandemic has had on the customer and their dependents.