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Press release
Repossessions warning in UK new Housing Review
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Contact: Neil Johnson Date: 17 Dec 2009 |
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The UK Housing Review 2009/10 published by the Chartered Institute of Housing (CIH) and the Building Societies Association (BSA) on 17 December identifies the importance of government initiatives to protect home owners at risk of repossession but calls for an extended credible safety net(6) to be put in place for the long-term.
Useful temporary measures have included reducing the nine month delay before unemployed home-owners can get help with their mortgage interest payments under the Support for Mortgage Interest (SMI) scheme, deferring the reductions in the SMI standard rate of interest and extended forbearance policies provided by lenders.
The number of repossessions will be lower in 2009 than the peak of 76,000 in 1991 – but the outlook for 2010 is still uncertain.
Analysis of repossessions by CIH’s consultancy arm - ConsultCIH - published in October 2009 identified some clear financial similarities and patterns of household behaviour. ConsultCIH predicts that if interest rates begin to rise steadily in 2010, people who have taken out a mortgage in the past four years, and those who have re-mortgaged in the past five, are more likely to be at risk of repossession.
At the same time, research published by the Building Societies Association has shown that the sooner a borrower contacts their lender or obtains free independent money advice the greater the chances of them staying in their home. The research found that 97% of borrowers who fell into arrears during the last two years have remained in their homes, demonstrating the effectiveness of the approaches taken by the vast majority of lenders.
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 repay their arrears and stay in their homes.”
~ENDS~
Contact -
Neil Johnson
020 7520 5903
neil.johnson@bsa.org.uk
Notes
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The Chartered Institute of Housing (CIH) is the professional body for people involved in housing and communities. We are a registered charity and not-for-profit organisation. We have a diverse and growing membership of over 22,000 – both in the public and private sectors – living and working in over 20 countries on five continents across the world. Our members work for local authorities, housing associations, Arms Length Management Organisations, Government bodies, educational establishments and the private sector. Many tenants and residents are also members. We exist to maximise the contribution that housing professionals make to the wellbeing of communities. Further information is available at: www.cih.org
The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 52 UK building societies. Building societies have total assets of over £370 billion and, together with their subsidiaries, hold residential mortgages of over £245 billion, more than 20% of the total outstanding in the UK.
The UK Housing Review 2009/10 by Steve Wilcox is published by the Chartered Institute of Housing (CIH) and the Building Societies Association.
Research undertaken by the Chartered Institute of Housing’s consultancy arm – ConsultCIH – looked at hundreds of repossession orders made in 2008. The findings identified valuable patterns of information around factors such as demographics, causes, lenders, court activity, advice services and support schemes. The research can be viewed at http://www.consultcih.co.uk/documents/final-repossession-nov09.pdf
The BSA report Understanding Mortgage Arrears can be found at http://www.bsa.org.uk/docs/publications/understanding_mortgage_arrears.pdf
BSA’s submission ahead of the Pre Budget Report makes a number of recommendations to the Government on the future of the SMI scheme. It can be found at http://www.bsa.org.uk/policy/response/pbr_submission.htm
