Lunchtime news Wednesday 6 August 2023

The Financial Services Authority warned mortgage firms that they should treat customers fairly as the number of repossessions rises and more homeowners fall into arrears. During the first three months of the 2008, repossessions rose 40 per cent from a year earlier, while the number of home loans in arrears increased 15 per cent. The FSA wants a flexible approach to those struggling from lenders, not a ‘one-size fits all’ policy.

Shelter responded by saying that the FSA had to clamp down on ’merciless mortgage lenders who are robbing people of their homes’. Adam Sampson, chief executive, said that Shelter was particularly concerned by evidence that some lenders are taking a tough line, putting homeowners at risk of repossession, when other solutions could have been found.

Meanwhile lender Halifax and housebuilder Persimmon have joined up to offer first-time buyers the chance to double their deposit. Persimmon will stump up an amount equal to the sum a Halifax account-holder has saved as a deposit, up to a maximum of £5,000, provided it is for a Persimmon property. But Halifax is not guaranteeing that the offer of a mortgage will be open to all depositors.

As the news that a stamp duty holiday may be on the cards to improve the house market, other options available for Alistair Darling are coming out. The Treasury is looking at ways of allowing local authorities to provide loans to potential buyers who have been refused a loan by commercial lenders. Another idea is to let council tenants use their right to buy discount as a deposit on a new home, and Mr Darling may be encouraged to reintroduce income support payments to cover the mortgage interest when homeowners lose their jobs or at risk of repossession. He said last month that he is planning a tax-free savings scheme to help first-time buyers raise a deposit.

The Tenant Services Authority is likely to scrap the traffic light assessment system for measuring the performance of housing associations. Its chief executive designate said ‘it was not the role of the TSA to be checking the development programme on behalf of the Homes and Communities Agency’. Housing associations are currently judged on how well they perform in four areas – development, governance, viability and management, and those performing well are given a green light, with problems flagged up as amber or red.