Second wave of repossessions ahead

14 August 2009

For sale signs

Shelter today warned again of an imminent second wave of arrears and repossessions and called on lenders to do everything they can to keep customers in their homes.

Figures published today by the Council of Mortgage Lenders show 11,400 cases of possession (equivalent to one mortgage in 1,000) in the second quarter of 2009, a 14% increase on the 10,000 cases of possession in the second quarter of last year.

The CML warned that while the economy remains weak and with unemployment still growing, arrears and possessions are likely to rise in the second half of the year.

Kay Boycott, Shelter’s Director of Policy and Campaigns, said: ‘These figures confirm that a rising number of homeowners are in a desperate struggle to keep their home.

‘Despite many lenders using more tolerant measures to help their customers, further action is needed if we are to prevent a second and more devastating wave of repossessions.

‘Shelter is today calling on lenders to always consider allowing homeowners in arrears to move their mortgage from high fixed rates onto low variable rates, while waiving any redemption penalty charges.

‘With interest rates set to remain low in the immediate future, this simple move could save homeowners hundreds of pounds every month and allow them to keep up repayments while paying off their arrears.

‘Banks have been bailed out with billions of pounds of taxpayers’ money. Now it’s time to ensure they do everything they can to keep customers in their homes.’

Ms Boycott added: ‘As more and more people fall into arrears, the Government must ensure that advice services match demand, and repossession prevention schemes, including the mortgage rescue scheme, reach as many people as possible’.

Get advice on repossession

If you are concerned about repossession, the most effective way to prevent it is to seek advice early: