More needs to be done to reduce repossessions, says organisation

10 February 2009



Government attempts to help homeowners in arrears are unlikely to be effective, claims the Centre for Policy Studies (CPS). In its report, Save 100,000 Homes from Repossession, the thinktank says lessons need to be learned from the problems experienced in the 1990s.

"During and after the last housing recession it was the court process which did most to help households in need," commented author of the study Natalie Elphicke. She added that judicial discretion plays a key role in civil claims, suggesting those who find themselves struggling with mortgage payments should take advantage of legal advice available to them.

By improving the court practice, the CPS predicts that 100,000 homes could be saved from repossession, notably by taking personal circumstances into account. This could be more crucial than ever as recent statistics from the Financial Services Authority reveal that in the three months leading up to September 2008, one home was repossessed every ten minutes.

Michael Larcombe, partner in the property practice comments: "During the current recession, it is expected that the lenders will do much more to help borrowers with court proceedings for possession being used only as a last resort.

"The Mortgage Arrears Protocol which came into effect in November 2008 (and is endorsed by the Council of Mortgage Lenders ) provides that all reasonable steps should be taken to avoid litigation. The reasonable steps would include discussing the cause of the arrears, the borrower's financial position, available benefits, and extending the term of the mortgage. In addition if the borrower has taken all reasonable steps to market the property in accordance with professional advice as to price, proceedings should not be started if borrowers agree to keep the lender advised of the sale progress.

"The protocol requires lenders to postpone court proceedings as long as the borrowers maintain current instalments and pay a reasonable amount towards the arrears. Hopefully with the additional government benefits being provided e.g. mortgage interest being paid on mortgages up to £250k in the event of unemployment, mortgage repossessions will not be as bad as anticipated."

If you require legal advice, for either your private affairs or organisation, please contact Buckinghamshire based B P Collins Solicitors or give us a call on 01753 889995.

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