Italian banks have suspended mortgage payments as part of emergency measures while the country is on lockdown due to the Coronavirus outbreak.

More than 9,000 people have been infected by Covid-19 in Italy and there have been 463 deaths reported.

Italy’s deputy economy minister Laura Castelli was asked on the radio whether mortgage payments would be put on hold and she said: “Yes, that will be the case, for individuals and households.”

UK Finance has previously pledged that banks and building societies here remain ready to offer mortgage payment holidays for those affected by the fallout from Coronavirus.

Natwest has confirmed that it will allow affected borrowers to defer payments for up to three months, after offering similar concessions to victims of recent flooding.

Habito chief strategy officer Martijn van der Heijden says: “Right now, it’s fairly commonplace for repayment holidays to be offered to customers who need help with their mortgage, so we expect to see more lenders reminding customers of this facility if they are eligible. 

“However, not all lenders offer repayment holidays and it’s likely that it won’t be offered to everyone – for example, those already in arrears, or who have bad credit – unless the Government mandates it.

“So, questions will now be asked if the UK could do the same as Italy for all households with a mortgage in the coming weeks of the pandemic.”

Van der Heijden says that total homeownership rates in Italy are at roughly similar levels to the UK, but many more people in Italy own their home outright. 

Here a much higher proportion of homes that are mortgaged (about 30 per cent compared to Italy’s 15 per cent) so the government will have to weigh up all the implications of letting the 9m outstanding residential mortgages, worth a collective £1,486bn, take a repayment holiday that could last months.

He adds: “It also raises questions for the millions of people who rent. On average, those with a mortgage spend 18 per cent of their household income on mortgage payments, whereas rent payments are 33 per cent of household income for private renters.

“If there’s a mortgage payment holiday for the estimated 200,000 buy-to-let landlords in the private rented sector – would those savings be passed on to their tenants?”