"It's time we face up to the terrible reality of home repossessions"

But around 20pc of those in arrears over 90 days are either deliberately going into arrears or else they are burying their heads in the sand and not dealing with their problems. The current legal ban on repossessions is encouraging this irresponsible behaviour and is discouraging those borrowers from addressing their arrears. The longer a borrower delays addressing their arrears, the less likely that they are able to recover. The sad reality is that some borrowers only deal with their problem when they get summonsed to court for a repossession hearing.


So it is good for defaulting borrowers if the Government restores the banks' right to repossess their homes. The defaulters will face up to their problems earlier and will solve them earlier.

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While around 15,000 borrowers fall into the category of strategic defaulters, a further 10,000 or so responsible borrowers have mortgages, which, despite their best efforts are unsustainable.


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But if a borrower cannot pay the mortgage interest on the current value of the property, then their mortgage is unsustainable. The Government needs connected thinking on this issue. It this borrower has children, it may well be cheaper for the State to pay the interest on their mortgage rather than to re-house them or to pay rent supplement. This would be particularly the case if the borrower has a cheap tracker mortgage.


That will still leave around 5,000 people who will not qualify for state assistance with their mortgage or their rental income. These borrowers and their lenders need to agree that the mortgage is unsustainable and the borrower needs to sell their home in an orderly manner. Such an orderly sale will maximise the sale price and minimise the legal costs to the lender and to the borrower.

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