Citizens Advice response to latest repossession figures

Citizens Advice Head of Consumer Policy, Sue Edwards, said: “Not only have the number of repossessions increased by 21% in the past year, but the total number, at 27,100, is almost twice the total two years ago in 2005. These increased figures reflect what Citizens Advice Bureaux are seeing nationwide. Last year, we dealt with over 57,000 problems about mortgage and secured loan arrears, an 11% increase on the previous year. The growth we have seen of so called ‘mortgage rescue’ or ‘sale and rent back’ schemes targeting people at risk of repossession may also mean the actual repossession figures tend to understate the true scale of the problems faced by borrowers at the margins of affordability.

“The findings of our December 2007 report on home ownership and debt Set up to fail showed that the current safety nets for homeowners on low incomes facing payment problems, such as income support for mortgage interest (ISMI), are completely inadequate, and these latest figures reinforce the need for much better quality and better value insurance products, for reform of ISMI, and for a housing benefit for homeowners similar to the help with rent available to tenants on low incomes.

“Our evidence shows that lenders are not always doing everything they can to help borrowers in trouble, all too often piling on extra charges and being too quick to take court action rather than being prepared to negotiate affordable repayment arrangements. We want to see all lenders being reasonable when dealing with customers who do get into trouble, and taking court action for possession only as a last resort.

“We also want to see tougher enforcement of existing regulation of mortgages, and for the same regulatory system to apply to all mortgages and other secured lending in future, instead of the fragmented regime that currently applies.

“We would urge anyone who is falling behind with payments on a mortgage or secured loan to seek free, confidential, independent advice from any Citizens Advice Bureau.”

For more information and a fact sheet on dealing with mortgage arrears go to the Citizens Advice website adviceguide.org.uk.