Homeowners get extra protection
Major lenders have agreed to wait three months after borrowers fall behind on mortgage payments before starting repossession actions, Alistair Darling said today.
The chancellor said they recognised repossessions – which are expected to rise sharply this year – should be a last resort.
The announcement came as Mr Darling unveiled a series of measures in his pre-budget report aimed at increasing availability of mortgage lending and curbing repossessions.
Among these was a new lending panel, including representatives from the government, trade groups, the Bank of England, and others, which will monitor lending to both businesses and households.
But the move with the biggest potential to increase mortgage supply was the chancellor’s commitment to pursue the main recommendation of the Crosby review of mortgage finance, also published today. Sir James Crosby, recommended that for a temporary period the government provide guarantees for securities backed by mortgage finance.
Mr Darling said the government would need state aid approval from the European Commission for such a plan. But he promised to work up a detailed scheme and seek approval.