Repossession schemes will only help small numbers

In a recent report it has been claimed that initiatives launched to try and minimise on repossessions will only help a small number of people.

The right learning centre for Policy Studies has stated that only a very small number of households will be helped through the various initiatives that have been put into place, which is not enough given that over the course of the recession around 145,000 households could face losing their homes through repossession.

The centre has also predicted that repossession orders will be filed against a further quarter of a million or so households over the course of the recession, as job losses and financial problems restrict the ability of many homeowners to keep on top of their mortgage repayments. Officials have said that courts need to be able to use more discretion with regards to who should be allowed to stay in their homes in such extreme circumstances.

A report from the centre said that courts had been given this sort of discretionary power in the previous recession of the early 1990s, and that without this any initiatives from the government would have limited impact.

The report stated: “Past experience suggests that the exercise of judicial discretion could prevent a large number of repossessions through the use of suspended repossession orders during the period of the current housing crisis.”

The report went on to state: “These proposals will only help those households which are considered by the courts to be able to repay their arrears and their mortgages. The risk of moral hazard will therefore be minimal.”

The shadow minister, Grant Schapps, said that the government’s initiatives were not enough, stating: “The measures introduced will simply not help the vast majority of the families facing repossessions.”