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More protection against repossession

March 03 2010
Homeowners who are struggling financially and facing repossession will be given greater protection under new legislation

Homeowners who are struggling financially and facing repossession will be given greater protection under new legislation. The Home Owner and Debtor Protection Bill, which came into effect in Holyrood in February, aims to make it more difficult for houses to be repossessed when homeowners fall into debt. Legal requirements mean that all cases will now have to be heard in court, and lenders have to prove they have taken reasonable steps to avoid repossession.

The new bill, which has already been implemented across England and Wales, comes into effect across Scotland in the summer. The latest legislation is a relief to many, with recent figures highlighting increased repossessions in the last 12 months. The Council of Mortgage Lenders have recently revealed that around 46,000 people lost their homes in the UK last year - up 15 per cent since 2008, a soaring 14-year high. Vulnerable homeowners in Glasgow, especially, have suffered, with new figures indicating around 1500 households faced eviction from mortgage creditors over a 12-month period - twice as many as in Edinburgh. The high figures were due to the predominance of smaller firms and secondary lenders, who buy up the mortgages made by primary lenders. These firms are less policed and publicised, and as a consequence, don't necessarily comply by government guidelines. They account for a large majority of repossession actions coming before authorities in the city: 45 per cent of actions were taken by well-known, high street mortgage lenders.

Since the alarming figures have come to light, Housing Minister, John Healey, has come under fire for his controversial statement on repossession, during a live radio interview, in which he said: "In some cases, it is the best thing for people who are struggling with their mortgage. Sometimes it's impossible for people to maintain the mortgage commitment they have. It may be the best thing in those circumstances."

His remarks sparked fury and outrage amongst many, especially when it emerged that Mr Healey allegedly made £88,000 profit on a subsidised flat in London.

The conservative Housing Minister, Grant Shapps, called on Healey to apologise to families who had lost their homes in the current economic climate. Sarah Teather, the Liberal Democrat housing spokesperson, said that his comments were "grossly insensitive" and that "he should just shut up" stating that "Labour has no idea what life is like for victims of the recession. John Healey needs to get out more before he starts dismissing the misery of homelessness."

Healey has since defended his comments and dismissed any calls for him to apologise. In an interview with BBC Radio 4, after his contentious remarks, he said: "I am trying to tell it like it is to people. It is impossible for the Government to help everyone, it is impossible for everyone to avoid the risk of repossession. It may be, in the end, for some, the only option."

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