Treasury Minister demands a 'more responsible' approach to home repossessions » Housing » 24dash.com

Treasury minister Yvette Cooper has demanded fewer home repossessions by banks as mortgage holders increasingly struggle to keep up with repayments.

The Chief Secretary to the Treasury is said to be working with the Ministry of Justice on tightening requirements on lenders seeking repossession orders in the courts.

"We need a more responsible approach to repossessions," she told The Observer.

"What we are looking at is something looking much more widely at all of the banks because I think repossession needs to be a lot rarer.

"We need to do everything that we can to keep people in their own homes."

The Council of Mortgage Lenders (CML) is predicting that 45,000 properties will be repossessed this year - up from 26,200 last year.

Ms Cooper suggested there was no way of avoiding "tougher times ahead", saying that the global nature of the slowdown was beyond the powers of governments to prevent.

But she added: "What we can do is step in and, by dealing with the problems in the banking system, prevent the worst of the credit squeeze hitting people."

The Government has been under pressure to curb state-owned Northern Rock's so-called "aggressive" repossession tactics.

Of the 19,000 homes repossessed in the first half of this year, about 4,000 were by Northern Rock.

On Friday, the charity Credit Action urged the Treasury to put pressure on Northern Rock to adopt a more flexible approach towards borrowers who fall behind on their mortgage payments.

The charity said that Northern Rock, which was nationalised in the wake of last year's catastrophic bank-run, was more than twice as likely to repossess homes as other lenders.

Ms Cooper said: "There are other things that banks can do, for example working with lenders maybe to re-profile the payments or maybe give people a repayment holiday so they are just paying interest for example, or other kinds of mortgage rescue schemes where maybe a share of the home is bought back either by a bank or a housing association too.

"So there are a lot of things that we can do to keep people in their homes even when they are under pressure."

"Some banks are doing that, you get all sorts of examples of best practice but also I am worried about some of the anecdotal reports we have had where this is not happening.

"That is why what we want to do is look at stronger rules across the board that all the banks will follow to make sure that actually we are doing everything we can to support people through a difficult time," she told Sky News.