Arrears proposals 'unlikely' to help lower repossessions

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Arrears proposals 'unlikely' to help lower repossessions

Fri 29th Jan 2010

The number of people who have their homes repossessed after falling into arrears is unlikely to fall following changes by the Financial Services Authority (FSA), according to John Charcol.

Ray Boulger, senior technical manager at John Charcol, said that there has already been a significant level of pressure on lenders to make repossessing properties a last resort.

The number that took place last year was lower than expected as the lower rent being charged meant arrears were building up more slowly.

In addition, the rise in unemployment was slower than expected, which resulted in fewer people having serious financial problems than had been anticipated.

The FSA recently set out measures to help homeowners who were finding themselves in financial difficulties which meant they could not pay off their rent or mortgage.

Some of the rules that are being introduced include firms not being able to add early repayment charges on to people who are already in arrears.

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