Think tank repossessions report sceptical on state support

11/02/2009

Government initiatives aimed at keeping people in their homes are unlikely to do much to stop repossessions from rising, according to a think tank.

The Centre for Policy Studies said that around 145,000 homeowners would be forced out of their properties in the current downturn, due to their struggle with making payments.

Around 245,000 other householders were also predicted to receive repossession orders against them from creditors.

However, the study recommended that the situation could be helped by courts using their own "discretion" to limit repossessions numbers.
State initiatives aimed at helping homeowners include the Homeowner Mortgage Support Scheme, which subsidises mortgage interest payments.

Report author Natalie Elphicke said: "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.

"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."

Tags; Housing Debt and Bills, Young Family Finances,

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