7 Jan

BBA moves to cut down repossessions

BBA moves to cut down repossessions

Banking regulators have introduced new measures to cut down on repossessions in the UK housing market.

Under the terms of the amendments to the Borrowing Revised code, mortgage providers will be compelled to contact homeowners who are at risk of defaulting on their mortgage repayments. The two parties will then work out a payment plan.

Previously the onus had been on borrowers who were struggling with repayments to make contact with their provider.

The move has been proposed by the British Banking Association (BBA) and is aimed at reducing the number of repossessions, which are expected to increase significantly next year.

BBA chief executive Angela Knight told the Independent: "Banks will have to adhere to this because this will be a contractual requirement as part of their membership of the BBA. We are not going to wait and watch as consumers get into difficulties.

"We would urge anyone facing difficulties to first contact their bank. This should be their first port of call. But we will also proactively contact them."

News of the reform to the regulations comes after the Council of Mortgage Lenders recently predicted that repossessions are set to increase by 75 per cent to 30,000 this year.
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