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Avoiding the 'R' word
The government has set out its case against repossession, ensuring it is the last resort for lenders.
Preventing repossessions is one of this government's top priorities in responding to recession. Because, when people are struggling to cope, we believe we have a duty to help where we can and let them know they are not on their own.
That is why we have been determined to respond differently to how government behaved during the last recession – to face up to, rather than step back from, the problem; to tackle repossession head on rather that leave matters to market forces. As the prime minister set out last December: "We want to do what no country has done before in providing new protections for home owners."
Compared with 1991, when Britain was last in recession, there are now more than a million additional homeowners with mortgages. If repossessions were running at the same rate as then the forecast for this year would be 91,000 families forced out of their homes.
Today, help is available at every stage. Rules and regulations are in place to ensure repossession is only ever the last resort. Safety net schemes provide a backstop support for those struggling to keep up with mortgage payments. We want lenders to treat people fairly. From the start of the global downturn, we have put pressure on lenders to extend forbearance to their borrowers.
It is important that people know their rights and the steps to take to avoid repossession. So the government has launched a comprehensive publicity campaign in hotspots, since extended and expanded to cover 56 local authority areas. And we have increased funding to £130m to provide free face-to-face debt advice services through to 2011.
The earlier a household receives help, the higher the chance of avoiding repossession, so we introduced changes to court rules to ensure lenders inform councils if they are taking action against a household so the authority can offer suitable help. And if the case does reach court, it is still not too late to stop repossession. One of my earliest moves on becoming housing minister was to guarantee access to an advice desk in every court on the day of a hearing.
For those is difficulty with their mortgage payments, the government has introduced targeted support schemes, including Mortgage Rescue and Homeowners Mortgage Support. Such action, alongside wider advice and support, has helped more than 330,000 families across the country.
Every repossession has the potential to involve personal tragedy. I am pleased though that the Council of Mortgage Lenders has revised its predictions for 2009, forecasting down the expected repossessions from 75,000 to 48,000 – more than a third of what they anticipated a year ago.
Original article, by John Healey, Minister for Housing and Planning, courtesy of CCR.
