Repossession is in 'nobody's interests'
Friday, 14th November 2008

It is in "nobody's interest" to repossess a property in today's market, according to the Homeowners Advice Centre.

According to advisor Al Elliot, lenders were particularly put off by the proposition of having to resell a house in the current conditions of the property sector as everyone knows the market will recover in the long term.

He said that rather than repossessing homes, lenders should aim to offer reduced repayment rates but retain a larger equity stake in the property.

Mr Elliot said: "Even if that equity was, in theory, 'negative', it only becomes such if the asset is sold and [so the lender could] sit back and wait for the property [market] to recover."

According to the Council of Mortgage Lenders in October, it expected 45,000 properties to be repossessed by lenders in 2008, which is equivalent to 0.38 per cent of housing deals in the country.

It added that there were currently 11.74 million mortgages in the UK.