More help needed to stem repossessions

Monday, 14 December 2009 12:00

Three charities are calling on the government and lenders to provide more help for struggling homeowners to prevent them being 'needlessly' repossessed.

Figures unveiled today by AdviceUK, Citizen's Advice and Shelter reveal in a third of repossession cases lenders had failed to comply with new rules which say borrowers in arrears should only be taken to court as a last resort.

Sub-prime lenders, the study found, were taking court action far earlier than high street lenders despite the fact they specialise in providing loans to riskier borrowers.

David Harker, chief executive of Citizens Advice, said the government, lenders and regulators had to take swift action to protect people affected by the recession from losing their homes.

He added: "Our advisers see evidence of these initiatives working in many cases, but our research makes it clear that the safeguards already in place to protect people from avoidable homelessness need to be strengthened if they are to succeed in stemming the rising tide of repossessions."

The report also highlighted that of those people who avoided immediate loss of their home, up to half could find it difficult to sustain repayments demanded by the court unless their incomes recovered.

With the most common cause of mortgage arrears being job loss, the charities fear this might be hard for many.

Kay Boycott of Shelter said: "With 2,000 people losing their job every day, we must close these gaps urgently to ensure every vulnerable homeowner gets the protection they need."

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