According to Shelter, AdviceUK and Citizens’ Advice, while almost eight out of 10 people were offered packages that allowed them to avoid repossession, up to half of those were placed in position whereby they would not be able to keep up with the new repayment plan without an immediate financial recovery.
The charities’ findings come from advisers offering last-minute advice to indebted homeowners in court on the day of their hearings. They say, in general, sub-prime lenders rather than high street banks have been quicker to push borrowers into legal proceedings.
GE Money Home Lending had the largest amount of borrowers facing repossession charges according to a survey by several homeless charities. Of nearly 2,500 borrowers facing court action, 15.8 per cent were GE borrowers, 12.8 per cent were Lloyds Banking Group borrowers and 7.4 per cent Santander borrowers.
When comparing number of repo cases compared with overall market share, GE Money Home Lending came top again – it has 1.2 per cent of the mortgage market according to the Council of Mortgage Lenders, but not counting it subsidiary brands, it counted for 7.1 per cent of all the court cases assessed by the charities. Kensington Mortgages came second in market comparisons with 0.4 per cent of market share but 6.1 per cent of court cases.
Citizens’ Advice Bureau chief executive David Harker says: “Our research makes it clear that safeguards already in place to protect people for avoidable homelessness need to be strengthened if they are to succeed in stemming the rise in repossessions.”
Shelter director Kay Boycott says: “The most common cause of mortgage arrears is job loss and with 2,000 people losing their job every day, we must close these gaps urgently to ensure every vulnerable homeowner gets the protection they need.”