Housing Minister John Healey today announced new protection for people struggling with mortgage arrears, by further tightening the rules on lenders taking court action for repossession.
New court rules coming into force on 1 October will ensure that mortgage lenders inform councils when repossession action is started against residents in their local area, leaving councils able to step in to offer advice and help for those most in need.
Councils are already playing an active role in providing impartial advice and support. This week’s changes will ensure councils can take early action, rather than waiting for worried homeowners to call.
These moves are on top of Government action in the courts to ensure lenders must prove they have exhausted every possible option before applying for a repossession order, and a new national advertising campaign pointing people concerned about their mortgage payments to seek practical help to take control of their finances.
Mr Healey has also written today to all council leaders saying that when councils hear from lenders taking repossession action against local people this should prompt them to offer practical advice or support for residents struggling to keep their homes.
This could include directing them to free debt and legal advice, helping them apply for benefits such as Support for Mortgage Interest or, for the most vulnerable households, assessing them for the Mortgage Rescue Scheme – part of the comprehensive range of support that the Government has put in place at every stage of the repossessions process. Over 300,000 people have benefited from financial help and advice with their mortgage since April last year.
John Healey said:
“We are tightening the rules to help protect those struggling with their mortgages. There is support available at every stage of the repossession process, but often local authorities are unaware of the difficulties faced by residents until it’s too late.
“There is a clear role for local authorities to help those in difficulty find the most appropriate options to prevent them going through the trauma of repossession, and lenders have a role in ensuring households do not slip through the net.
“Thanks to these changes, councils will now have the ability to take early action for local homeowners, and go to them with the help they need rather than waiting for their call.”
Latest figures from the Council of Mortgage Lenders showed there were 11,400 repossessions between April and June this year – a 10 per cent drop on the previous quarter, and compared to a peak of 75,500 repossessions in 1991.
But Mr Healey stressed that people are still under pressure and the risks of repossession will remain high throughout this and next year. He has recently launched a new national advertising campaign to help struggling homeowners take control of their finances and make the most of the support available for them to avoid repossession and stay in their homes.
The advertisements recommend anyone concerned about meeting mortgage payments to go to www.direct.gov.uk/mortgagehelp (external link) or contact the National Debtline on 0808 808 4000 for practical advice to take control of their finances.
While this is a national campaign, extra advertisements are appearing in 22 ‘hotspot’ areas facing a greater risk of increased repossession due to higher levels of unemployment and numbers of court orders.