Homeowners 'need long-term safety net'

The government must do more for home owners to prevent repossessions rising in 2010, according to a review of the housing market.

The UK Housing Review 2009/10 from the Chartered Institute of Housing and the Building Societies Association calls for a long-term safety net in the face of growing unemployment.

The report praises the government’s decision to reduce the nine-month delay before unemployed home owners receive help with their mortgage interest payments under the Support for Mortgage Interest scheme, deferring the reductions in the SMI standard rate of interest and extended forbearance policies provided by lenders.

Research by Consult CIH, the Institute’s consultancy arm, predicts that if interest rates rise in 2010, those who have either taken out a mortgage in the past four years or remortgaged in the past five, are more likely to be at risk of repossession.

Richard Capie, CIH director of policy and practice, said: ‘A long-term safety net for vulnerable home owners is essential if we are to support people to stay in their own homes throughout the recession and beyond.’

Paul Broadhead, BSA head of mortgage policy, said: ‘Falling into mortgage arrears is always a worrying experience for the individuals involved and every repossession represents a great personal tragedy

‘We have long suspected, and research now proves that if a borrower contacts their lender as soon as they realise that they may face difficulties, the overwhelming majority manage to repays their arrears and stay in their homes.’

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