Second-charge loans repossessions 'stay low'

15/05/2009

Actions from one kind of lender are helping to keep home repossession numbers down, according to one industry group.

In a new report released today, the Finance & Leasing Association claimed that in January-March 2009, so-called "second charge lenders" were responsible for the loss of 373 homes out of a total of more than 10,000 repossessions nationwide.

This low level is also close to the number recorded in January-March 2008, before the onset of the recession in the UK.

Second-charge loans are a kind of credit that sees a homeowner take out a loan secured against their home.

If they fail to repay, their home can be repossessed.

Official repossessions figures show that the number of people losing their homes rose from 27,000 in 2007 to 40,000 last year.

Some groups predict that this total could double again in 2009.

Stephen Sklaroff, director general of the Finance & Leasing Association, said: "Our figures show a continued low level of repossessions.

"Second charge lenders recognise the pressures that many people face in the midst of recession. It is to their credit that the number of repossessions has remained almost flat compared to the same period last year."

Kevin Still, director of EuroDebt, added: "It is encouraging that second charge lenders are following the same line as many of the first charge lenders, for example for mortgage providers, and looking at alternatives to re-possession.

"It is important that there is consistency, especially where the mortgage arrears Protocol is being applied on the primary secured borrowing."

Tags; Housing Debt and Bills, Credit Card Lifestyle, Young Family Finances,

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