By Alan McIntosh

THE Scottish Government's decision last Friday to lay the Coronavirus (Extension and Expiry) (Scotland) Bill to allow parts of the Coronavirus (Scotland) Act 2020 to continue until March 2022, with an option of a further extension until September 2022, is to be welcomed.

This crisis is not over yet, and with the UK furlough scheme winding down from next month, the economic impact of this crisis remains an unknown known: we know there will be an impact, we just don’t know how severe it will be. 
However, this crisis is a moving target and the Scottish Government must use this bill as an opportunity to not just extend existing protections, but review whether additional ones are required. 
When the crisis began last year, the UK’s financial regulator, the Financial Conduct Authority (FCA) reacted quickly and required all mortgage providers to provide payment breaks for homeowners. This and historically low interest rates is why during this crisis we have heard few calls for specific Government support for homeowners. This includes the Scottish Government, which last year extended the legal notice period with which landlords have to provide tenants from one month to six months, when they had rent arrears. No such extension, however, was introduced for mortgage providers, who can still raise court action with two months’ notice.
To date, there has been no major crisis for homeowners, but that could change quickly once the UK furlough scheme ends and lenders pull back on the support they have been providing borrowers.
In addition to that, homeowners, unlike tenants, do not get support from Universal Credit (UC) with their housing costs; and other benefits, such as Discretionary Housing Payments, are not available to them. The only benefit they are able to claim is Support for Mortgage Interest Payments, and this does not become available for 39 weeks, unlike during the last crisis, when it could be claimed after 13 weeks of entitlement to a qualifying benefit. Also it is no longer a benefit, but a loan that is secured over your home and only pays 2.09 per cent of interest on the first £200,000 of a mortgage. For some, this level of support may mean it will cover the full interest on their loan, but it should also be remembered there are more than 250,000 mortgage prisoners in the UK, usually older borrowers, who are trapped on banks’ Standard Variable Rates, which are significantly more than 2.09%.
Ideally, the Scottish Government should reintroduce the eviction and repossession ban, but it needs to also provide homeowners with the same protections that tenants have and extend the notice period that mortgage providers must provide, from two months to six months.
The new bill that has been laid in coming days, is an opportunity to do that. We must ensure that when the public health aspect to this crisis ends, Scotland has a recovery strategy that will protect everyone.

Alan McIntosh is a Senior Money Adviser