Homeowners have been warned by one of the UK's leading debt charities that an economic recovery could actually lead to a rise rather than a fall in property repossessions.
The Consumer Credit Counselling Service (CCCS) said that lenders may move to repossess property from borrowers in arrears who they had previously shown leniency too as the economy – and housing market – improves.
"There is no doubt lenders have shown leniency towards debtors during the recession. However, this may have been partly determined by the markets," Delroy Corinaldi, CCCS's director of external affairs said.
"Some lenders are reluctant to allow struggling debtors to switch to interest-only mortgages, giving people breathing space to find other more sustainable options," Mr Corinaldi said. The charity counsels a large number of clients with suspended repossession orders on their homes which lenders have chosen not to enforce despite clients failing to meet court stipulated payments.
This situation is likely to be aggravated in October when Support for Mortgage Interest payments for those who have lost their jobs are halved from 6.08 to 3.09 per cent.Reuse content