ROOF Blog

Figures from the Council of Mortgage Lenders (CML) show the number of people who lost their homes has soared by more than 50 per cent during the first quarter of the year. A total of 12,800 properties were repossessed by first-charge lenders during the three months to the end of March, up from 8,500 a year earlier (a 50 per cent increase) and up 10,400, or 23 per cent, from the previous quarter. Despite these figures, CML said its forecast of 75,000 repossessions during 2009 now looked pessimistic and say they may revise the figure downwards.

In related figures, the Ministry of Justice saw a big drop in the number of lenders getting court permissions for the early stages of repossession. There were 17,054 repossession orders granted in the courts in the first three month of the year, which was 39 per cent lower than in the same period a year earlier and 43 per cent lower than in the last three months of 2008. The ministry said the mortgage pre-action protocol coincided with a fall of around 50 per cent in the number of new mortgage repossession claims being issued, but whether the protocol resulted in claims being delayed rather than abandoned was ‘unclear’.

A coalition of charities, including Shelter, which pushed for better government measures to help vulnerable people stay in their homes, has warned that while mainstream lenders have improved their treatment of homeowners, those with sub-prime and second charge loans were not getting the same treatment. Research has found that 51 per cent of advisers had seen an improvement in the procedures from mainstream lenders, but only one in five have seen any improvement in arrears collection for the sub-prime and remortgaged homeowner. 

Meanwhile, the Ministry of Justice has released its fourth quarter statistics on mortgage and landlord possession actions. It found that mortgage possession claims were 29 per cent lower year-on-year, but possession orders were 14 per cent higher than the last quarter of 2007. Landlord possession claims were 3 per cent lower year-on-year, while possession orders were 2 per cent lower. The mortgage pre-action protocol was introduced during this period.

New guidelines that state that lenders must only use repossession as a last resort came into effect yesterday. The Civil Justice Council has drawn up a pre-action protocol, encouraging households and lenders to settle problems before they go to court, and which give struggling homeowners stronger legal support. The guidelines also urge borrowers and lenders to take reasonable steps to communicate at an earlier stage and discuss issues as they come up.