Issues for homeowners

This content applies to England only.

Even if you can get on the property ladder, things like getting sick or losing your job can put you at risk of building up debts and losing your home.

And as house prices increased dramatically over the last decade, so too did the number of borrowers who took out risky mortgage loans in order to buy a home. This stretched people to their financial limits, and when the economy crashed they found themselves in real trouble – still facing sky-high mortgage repayments but often with lower wages and higher household bills.

Many people had their homes repossessed. Others found themselves in ‘negative equity’ – meaning their homes were valued at less than what they had originally bought them for, pushing them into debt.

The Government’s response

There are a range of Government and other schemes available to help those homeowners struggling with their mortgage, including the Mortgage Rescue Scheme.

Shelter has campaigned hard to reform these to ensure homeowners are protected, and that they receive help and assistance at the earliest possible stage.

Shelter’s view

Responsible arrears management

Lenders must show responsibility when dealing with homeowners who get into difficulty with their mortgage payments. They should explore cost-effective ways to solve the problem, for example repaying the arrears in instalments. Repossession action should be taken only as a last resort.

Improving the safety net for mortgage borrowers

Today, all it takes is an illness or redundancy for someone to fall into a negative spiral that can lead to debts and sometimes even homelessness. We must make sure there is a strong safety net in place for those who fall on tough times, so they can get back on their feet as quickly as possible.

Shelter believes the current safety net for mortgage borrowers struggling to meet their bills needs to changed and strengthened:

  • It should be realistic and cover the actual costs households face in paying their mortgages when they fall on tough times. It should provide protection against the issues that actually cause the bulk of arrears cases, such as job loss or illness.
  • It should be balanced to ensure households in financial difficulties get help to meet their mortgage payments, without encouraging people to take our risky mortgages in the first place.
  • It should be simple and universal so consumers don’t have to navigate their way through the small print of contracts to discover exclusions and limits to their cover.

Shelter is on hand to help everyone who faces housing difficulties, and you can find support for homeowners in our Get Advice section:

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