The charity said despite the falling repossession figures, the public sector cuts mean it is widely expected that this is just the calm before the storm.
“It is crucial that further measures are put in place now in preparation, said
Citizens Advice chief executive, Gillian Guy.
“Both lender forbearance and the current package of policy measures have made a real impact to ensure people aren’t losing their homes unnecessarily, so we are urging lenders to continue to treat people in arrears fairly. We are also calling on the government to maintain the mortgage rescue scheme and other help towards mortgage interest payments for those who have lost their jobs,” she said.
Guy said debt advice for homeowners should continue to be a funding priority, including free legal advice in court for those facing repossession actions.
“It is estimated that immediate repossession is avoided in 85% of cases where people attend court and receive advice on the day,” she said.
Helen Newton, spokesperson for the Money Advice Trust, said ultimately, repossession benefits no one because borrowers lose their home, lenders take a big hit in losing the mortgage repayments and the Treasury also loses money.
“There were still nearly 20,000 repossessions in the first half of 2010, and given that the Department for Communities and Local Government (CLG) estimates the cost to the Government of repossessing a vulnerable household to be around £16k, it is clear that continued hard work and cooperation between Government, money advice agencies and mortgage lenders is required to ensure the downward trend continues and the Chancellor’s bill for repossessions is minimized,” said Newton.
“It is also encouraging to see mortgage arrears in decline too; however we are concerned that any rise in interest rates will quickly reverse this trend with many borrowers unable to make increased repayments,” she added.
