The Financial Conduct Authority (FCA) has updated the industry on repossessions on mortgages and consumer credit goods during the pandemic.

In November 2020, the FCA published guidance which meant firms should not have enforced repossessions before 31 January 2021.

On 13 January, it published updated draft guidance for comment. It has now concluded that for mortgages, firms should not enforce repossessions - except in “exceptional circumstances” - before 1 April 2021.

For consumer credit though, firms will be able to repossess goods and vehicles from 31 January 2021.

The guidance emphasises that this should only be as “a last resort”, and subject to complying with relevant government public health guidelines and regulations, for example on social distancing and shielding.

“Importantly, firms will need to consider the potential wider impact on vulnerable customers, including because of the pandemic, when deciding whether repossession of goods or vehicles is appropriate,” the FCA said.

“Our approach reflects the different risks and harms that customers with goods or vehicles on credit are likely to face compared to those who are at risk of losing their home at this time,” the FCA added.

The FCA said those experiencing financial difficulties because of COVID still have until 31 March 2021 to apply for a payment holiday to their lenders, covering mortgages, personal loans, credit cards, store cards and catalogue credit, motor finance (including hire-purchase and leasing agreements) and rent-to-own, buy now pay later, high-cost short-term and pawnbroking agreements.

Consumers can request a payment holiday of up to six months in total, but lenders can only agree a payment holiday of up to three months at a time.

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