Mortgage News
Repossessions to rise as market recovers
The number of repossessions could increase as the housing market recovers and previously lenient lenders show their teeth, the debt charity Consumer Credit Counselling Service (CCCS) has warned.
The CCCS said that, during the recession, lenders had shown greater tolerance of clients who had fallen into debt by not enforcing suspended repossession orders.
The debt charity said it currently counsels a large number of people with suspended possession orders on their homes, which lenders have chosen not to enforce despite clients failing to meet court stipulated payments.
However, the CCCS said this situation will alter, with changes to the Support for Mortgage Interest scheme likely to aggravate matters.
From October, Support for Mortgage Interest payments to people who have been made redundant will be slashed 6.08% to 3.09% to come in line with the Bank of England’s average mortgage rate.
Delroy Corinaldi, director of external affairs at the CCCS, said: “There is no doubt that lenders have shown leniency towards debtors during the recession by not enforcing suspended possession orders. However, this leniency may have been partly determined by the markets.
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“In addition, some lenders are increasingly showing reluctance in allowing struggling debtors to switch to interest-only mortgages as a short-term solution, giving people the necessary breathing space to find other more sustainable options.”