Launch of £20m fund to prevent repossessions

Permalink: Launch of £20m fund to prevent repossessions
by Gill Montia

The Government has announced a new £20 million safety net to help ensure that repossession remains the last resort for struggling mortgage borrowers.

According to Housing Minister, Grant Shapps, the Preventing Repossessions Fund gives councils in England the opportunity to offer interest-free loans of less than £5,000, or grants to help ease debt pressures, giving households a breathing space to get back on top of their finances.

In addition, the funding includes £1 million to ensure that free on-the-day legal advice is on hand in every county court in the country, for homeowners at risk of repossession.

This should plug the gaps in the Housing Possession Court Duty Scheme by ensuring that all courts are able to offer a viable service.

Local authorities are also being encouraged to work innovatively and flexibly with lenders, homeowners and one another, to ensure the threat of repossession is tacked in the best way for their area.

Mr Shapps comments: “Repossession should only ever be the last resort.”

He adds: “Getting advice early is important but even for people facing a court hearing repossession is not a foregone conclusion.”

Last week, the Council of Mortgage Lenders revealed that the number of homes taken into possession by first-charge lenders fell to 36,200 in 2011, with the total at its lowest since 2007.

However, lenders are bracing themselves for higher unemployment and greater cost of living pressures, which they expect to result in around 45,000 repossessions and around 180,000 mortgages in arrears by the end of 2012.