This is according to a report, Long Term Safety Nets to Protect Mortgage Borrowers, published for the Building Societies Association (BSA). It explores alternative solutions that could help keep people in their homes if they fall into mortgage difficulties.
John Howard, broadcaster and former chairman of the Financial Services Consumer Panel, is the author of the report which takes a critical look at the often bewildering array of solutions to help borrowers who struggle to meet their mortgage payments.
Paul Broadhead, head of mortgage policy, BSA, said: "We believe that now is the time to carry out a holistic review of the safety nets available to protect borrowers in difficulties, from both a public and private perspective. I hope that the challenges we have identified and the possible solutions provided can be the subject of detailed discussions amongst all stakeholders and Government departments."
Possible solutions covered in the report included forbearance, a more substantial mortgage rescue scheme, new forms of tenure and insurance compulsion, leading John Howard to conclude: ".... there is no doubt that the costs of repossessions are very significant and that present arrangements are piecemeal and insufficient. Any new arrangements are likely to require some form of subsidy from the State and the rules in the changes on benefits would be a good opportunity to consider a new scheme, at a time when we could be on the verge of repossession figures rising again to record highs."
Broadhead concluded "I believe that we all have a shared responsibility to create an improved system that works better together in the future. Not an easy task but without doubt an important one. Our debate is the first step for industry in accepting the challenge and working together. The BSA will be publishing some of the key outcomes in a forthcoming industry report."
