ROOF Blog

Mortgage lenders are failing to follow rules designed to help people avoid repossession, according to a damning report published today.

The joint report by AdviceUK, Citizens Advice and Shelter found that in a third of recorded cases mortgage lenders had failed to comply with new rules – known as the ‘pre-action protocol’ – requiring them to take court action as a last resort only.

Before starting legal action, lenders should offer borrowers other options for dealing with their arrears – however, judges only verified they had done so in a handful of cases.

Published on the same day as new repossession figures are expected from the Financial Services Authority (FSA), the ‘Turning the Tide?’ report is based on research into hundreds of cases seen by advisers who give last-minute advice to people at court on the day of their repossession hearings.

The true extent of the financial pain that will be felt by households and public services over the next few years has been laid bare by the Institute for Fiscal Studies (IFS).

Even those on half typical earnings will see their living standards suffer as a result of the Chancellor’s policies, the think-tank warns. 

To protect the ‘ringfenced’ areas of hospitals, schools and the police, there will have to be savage cuts to defence, housing, transport and higher education budgets.

Cuts of almost seven per cent a year, 20 per cent over three years, mark the severest squeeze since the Second World War, tougher than anything in the austerity years of the 1970s or early 1980s.

The IFS analysis of the Chancellor’s pre-Budget report also shows a £76bn ‘black hole’ in the public finances; that fixing it will cost every family £2,400 a year; and that only those on less than £14,000 will be better off as a result of the changes.