Government Introduces New Rules To Help Protect Homeowners

The Government has announced new rules to help protect homeowners, who may be facing the threat of repossession.

New court protocols will help make repossessions a last resort, and the Government is proposing that companies engaged in sale and rent back schemes, which may target vulnerable home owners, should be brought under FSA regulation.

The Master of the Rolls has approved the Civil Justice Council's new protocol for the courts in mortgage repossession cases. This sets out clear guidance on the steps that lenders are expected to take before bringing a claim in the courts to ensure that repossessions are a last resort.


Lenders will now be expected to demonstrate that they have tried to discuss and agree alternatives to repossession when borrowers get into trouble with their mortgage repayments. If a case reaches court, lenders will be required to tell the court precisely what they have done to comply with the protocol.

The Government will also be publishing a consultation paper on bringing sale and rent back under FSA regulation, responding to recommendations from the Office of Fair Trading's (OFT) study into the Sale and Rent Back market which was published last week.

Housing minister, Margaret Beckett said: "We must ensure that every avenue has been explored before lenders seek to repossess homes. These new measures will further protect the most vulnerable households in the current economic climate. We have expanded free legal representation in county courts for households at risk of repossession, we have provided more free debt advice and will continue to work closely with lenders through this difficult time. It is important that households who have concerns over their mortgage seek advice at the earliest opportunity, starting by speaking to their lender."

(CD/JM)