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Government Action to Prevent Repossessions

A wide range of pro-active steps are being taken by the Government in an effort to reduce the impact of the present economic conditions, this has included a commitment by the Financial Services Authority to regulate the sale and rent back market, and encouragement of greater lender forbearance.

The key actions to prevent repossessions for homeowners are summarised below along with details of how you can access more information.

1. Public awareness campaign and debt advice

• getting advice early is crucial to helping households avoid repossession
• public awareness campaign launched 20 February 2009, further information can be found at the following website; http://campaigns.direct.gov.uk/mortgagehelp/index.html Opens in a new window
• further £15m for debt advice services

2. Protection through the courts

• pre-action protocol setting out what lenders should do before taking action to repossess

3. Extra advice for households at court

• housing repossession court duty scheme operating across all Courts from April 2009
• funded by Community Legal Services Commission and contribution from CLG

4. Enhanced Support for Mortgage Interest (SMI)

• provides support for out of work households
• enhanced SMI for 2 years - doubled capital limit to £200,000, shortened waiting period to 13 weeks
• frozen rate at 6.08%
• effective from 5 January 2009 across the whole of the UK

5. Mortgage Rescue Scheme

• support for vulnerable households
• Local authorities and housing associations step in to help them stay in their homes
• Launched across England on 16 January 2009. Full information guide distributed to all local authorities in January 2009. More information can be found at the following website; http://www.communities.gov.uk/housing/buyingselling/mortgagerescuemeasures/ Opens in a new window

6. Homeowners Mortgage Support Scheme

• For households suffering an income shock
• Allows for borrower to defer interest and reduce monthly payments
• Commencing April 2009
• further information can be found at the following website;
• http://www.communities.gov.uk/housing/buyingselling/mortgagesupportscheme/ Opens in a new window

7. Repossession Prevention Fund

• £20 million fund to be allocated soon to local authorities
• open to anyone threatened with homelessness either through repossession or eviction. For example, it could be used to clear mortgage or 2nd charge arrears in appropriate cases, where this would prevent repossessions.
• maximum loan £5,000 and is conditional on the household seeking money advice with CAB or other money advice agencies that are used by the Council

8. Better protections for tenants

• We have committted to change the law as soon as possible to give better protections and a decent notice period to tenants whose landlords are repossessed
• We are are also working with lenders to improve best practice

This range of Government support announced since September is underpinned by:-

• FSA regulation - to ensure customers are treated fairly
• Greater encouragement of lender forbearance
• Local Authority homelessness prevention work and safety net

 

Further advice or assistance regarding any of the above issues is available by contacting the Housing Department on 0845 1211555.

Information Leaflets

Mortgage Rescue Schemes Opens in a new window

Mortgage Advice Opens in a new window