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Plan to limit repossessions announced

22/10/2008

New rules announced by Prime Minister Gordon Brown today will mean courts must be certain lenders have ‘exhausted every avenue’ before they repossess borrowers’ homes.

The rules have been put into place to prevent lenders from ‘rushing to repossess’ when homeowners find themselves unable to keep up on payments.

Repossessions are expected to rise in the coming months as more people default on mortgage payments and find themselves with debts that they are unable to repay. The Council of Mortgage Lenders (CML) has estimated that 45,000 properties will be repossessed this year, up from 26,200 last year.

However, a large increase in repossessions could spell further trouble for the economy, since the increased number of empty houses on the market would drive house prices down even further, plunging many more households into negative equity.

A spokesperson for Debt Advisers Direct said: “Repossessions could well become more of an issue as the economic crisis progresses, so it’s reassuring to see that the Government is addressing the issue.

“The best course of action if you find yourself struggling with debt is to tackle it head-on, before it’s too late. Talk to your mortgage provider, talk to a debt adviser – there may be a number of debt solutions which could help you repay your debts, as well as keeping your lenders satisfied.”

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Debt Advisers Direct offer a range of debt solutions for people in various financial situations. If you are worried about mortgage arrears or any other debts, contact one of our expert debt advisers today.

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