Surge in property repossession fears prompts new guidelines in UK

Judges in the UK are to receive new guidelines on property repossessions as concerns increase that the number of houses seized for non-payment of mortgages could soar with the country moving into recession.

Mortgage providers will have to demonstrate to the courts that repossession is being sought because all other options have failed. They will have to show that they have tried other measures such as repayment holidays, changing the type of mortgage and extending the length of the mortgage.

If banks and building societies cannot demonstrate that they are seeking repossession as a final option then country court judges can halt or adjourn the action under the new guidance.

The measures have been welcomes by the Council of Mortgage Lenders whose members provide around 98% of all residential lending in the UK. Director General Michael Coogan said there is significant public concern about repossession.

It has published new guidance for its members to ensure that arrears management policies are up to scratch. 'The new guidance should help to reassure consumers that lenders are genuinely committed to seeing repossession as a last resort, and that the checks and balances that protect consumers are in place,' he said.

The number of repossession in the UK is at its highest since 1996 and up 48% on last year.

Consumer organisation, the Citizens Advice Bureau said anyone experiencing difficulties with payments should seek advice as soon as possible. 'People facing payment problems worry about whether they will get fair treatment and may put off seeking advice as a result. But the earlier people seek advice the better,' said Director of Policy Teresa Perchard.

'We welcome this guidance, which acts as a good yardstick for borrowers and money advisers about the kind of practical treatment they might expect to see from responsible lenders,' she added.