According to London & European these figures provide an incomplete picture and only serve to mask a ticking time bomb. The falling figures for the number of repossession claims are being widely hailed as a successful result of the new mortgage pre action protocol (MPAP), that came into force in November last year. MPAP is aimed at reducing the number of repossessions by giving clear guidance to lenders on what is expected of them to mitigate the chances of repossession.
Commenting, Christopher Taylor said: “The recent report by the Ministry of Justice only takes first charge mortgages into consideration and does not include the significant increase in repossessions being seen in the second charge market. Also, this fall in repossession claims does not necessarily mean claims will never be made – it’s possible that they have simply been delayed as a result of the MPAP; we’ll know more when the figures for the first quarter of the year are published. The CML is standing by its forecast of 75,000 repossessions this year, and with the number of redundancies rising, no amount of protocols will ultimately prevent repossession if a homeowner can’t afford their mortgage payments.
“The introduction of the government Home-owners Support Scheme initiative has been delayed but there’s a wide assumption amongst consumers that it is already in place; with less state aid readily available and less people signing up for MPPI policies, repossessions are a ticking time bomb. With all this in mind it is clear to me that the MPAP has merely served to delay the inevitable.”
