Charity calls for clarity on 'second charge' repossessions

05/08/2008

More people are facing repossession than is admitted to by the government, a charity said today.

Shelter claimed that official figures do not include repossessions stemming from "second charge" home loans.

This form of lending is taken out by borrowers against their property, which means that they can have their home taken from them if they fall behind on payments - just like mainstream mortgages.

Shelter says that, if the "second charge" repossessions are taken into account, the true figure could be up to 20 per cent higher than the government's.

The warning comes as City watchdog the Financial Services Authority publishes its first-ever set of official repossessions data today.

According to the body, the number of people who had their homes repossessed rose by 40 per cent from January to March 2008, to hit 9,152.

The FSA also criticised the actions of mortgage lenders who enacted these repossessions, saying that many were "too ready to take court action" against struggling homeowners.

Tags; Housing Debt and Bills, Debt Management and Banking,

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