Repossession Taskforce Reports

“Supporting households to reduce debt is not only important for those individuals and their families but will be at the heart of a functional housing market and prosperous economy.” Housing Repossessions Taskforce, Final Report, February 2015

Since early 2014 the Repossession Taskforce has been examining the impact of negative equity and repossessions in Northern Ireland and working to identify what actions can be taken to mitigate their impact. Today (12 February 2015), the Taskforce presented its final report to the Social Development committee.

The report recommendations

In the final report, the Taskforce has recognised the complexity of the challenge and clearly identifies the need for a concerted effort from all key stakeholders to meet these challenges.

Borrowers should:

• access free independent advice at the earliest possible opportunity and
• positively engage with their lender; (work will be undertaken by government to look at how borrowers can be encouraged to engage at an early stage).

Lenders should:

• consider the development of additional products, such as mortgage porting to assist people who are in negative equity.
• look at innovative forbearance options implemented in other jurisdictions and consider making them available in NI.
• develop an Assisted Voluntary Sale option for their customers and offer this at an early stage.

Government should:

• develop a Mortgage Options Hub to ensure the best possible support is available to individuals and families at risk of or facing repossession.  This would provide a single point of contact for borrowers and help support lenders to meet their responsibilities to treat customers fairly.
• conduct a feasibility study on the potential for introduction of a Mortgage Rescue Scheme in NI by spring 2015.
• increase funding for the Mortgage Debt Advice Service to meet demand & ensure systems are in place to facilitate effective referral to this specialist service from generalist advice agencies.
• continue funding for the Housing Possession Court Duty Scheme to provide advice and support on the day to people who are attending court for a possession hearing.

HM Treasury should

• continue to fund “Support for Mortgage Interest."

Housing Rights Service Involvement

Housing Rights Service has been a key member of the Taskforce since its inception with a number of other organisations including statutory and private bodies. Welcoming the report, Janet Hunter, Director of Housing Rights Service, said

“This is a fair and balanced report which identifies both the scale and complexity of the problem we are facing here in NI. It stresses the importance of people, who are struggling or worried about mortgage debt, seeking free and independent advice as early as possible. It also places a responsibility on Government and lenders to ensure the necessary support services are in place and a range of realistic options available for people when they reach out for help.”

Going Forward

To help secure the delivery of the recommendations and to monitor developments in the arrears and repossessions landscape in NI, the Taskforce proposed an Implementation Team should be in place by March 2015.  This should include seconded experts from the advice sector and a mortgage lender.  

Background to the Taskforce

The Mortgage Repossession Taskforce was established by the Department for Social Development (DSD) in 2014 following concerns about higher levels of repossessions and negative equity in Northern Ireland, compared to other parts of the UK.

An initial evidence paper was published by the Taskforce in July 2014.  This drew on available data and the expertise of members to outline the negative equity, arrears and possessions landscape in NI.  The detailed analysis concluded:

• Whilst repossession is a feature of any normal functioning housing market, the scale of the problem in NI is disproportionately high and poses a threat for the recovery of the local housing market and the economy.
• The number of homes being repossessed in NI is greater than elsewhere in UK or Ireland.
• The situation is expected to deteriorate further over the next few years, with projections that it may double in the period to 2018. 

The Task Force suggests the problem is rooted in the volatility of the NI housing market.  It is also linked to borrower and lender behaviour in a period of rising house prices and relaxed credit conditions.  This has helped to create an underlying problem of high levels of negative equity and a situation where a large number of local borrowers were very vulnerable to the reduction in their incomes.  There are many reasons for this occurring; primarily the economic downturn, but also changes in personal circumstances such as relationship breakdown, bereavement or long term illness.