Debt help: Extension to government scheme could benefit mortgage holders

27/01/2010

Homeowners who choose to tackle their debt with a Debt Management Plan could benefit.

The campaign to tackle repossessions, lead by John Healey, the housing minister, has already helped over 330,000 people who were struggling with debt and mortgage repayments.

Mr Healey said: "With the pressure on homeowners set to continue this year, I'm determined that they get the help they need."

As part of the scheme, councils in 'hotspot areas' for repossessions will be given £2 million to boost the Preventing Repossessions Fund and help homeowners catch up with arrears.

According to the Council of Mortgage Lenders (CML), low interest rates have meant fewer households falling into arrears as a result of temporary disruption of incomes, and a much greater range 'coping strategies' for those who face payment difficulties.

The number of borrowers behind by 2.5 per cent or more of their mortgage is forecast to edge up to 205,000 by end-2010. Re-possessions are expected to increase to 53,000 by the end of 2010.

Director of EuroDebt Kevin Still commented: "It has also been claimed that the rise of SARB (Sale And Rent Back) providers has suppressed the re-possession figures, where they purchase the property off people with debt problems at well below market rate and then rent the property back. This option is often preferred to re-possession."

Tags; Debt Management and Banking,

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