Alternatives to repossession 'must be sought' ? buy to let mortgages

17 November 2008

Lenders must start to implement alternatives to repossession, it has been claimed.

In news that may interest those with buy to let mortgages, Al Elliot from the Homeowners Advice Centre has highlighted ways that repossession can be avoided.

One suggestion Mr Elliot made was for lenders to offer lower repayments in return for higher equity in the property.

This would allow both the owner and the lender to wait for a recovery in the market, he explained.

"Then, the homeowner can either sell up and repay the bank and start again, or increase repayment when they can to make up the difference," he said.

Mr Elliot stressed that repossession should only be used as last resort, saying: "It seems to me that it serves nobody’s interest to possess and force a sale in today’s market."

Recently, the Council of Mortgage Lenders predicted that 45,000 properties would be repossessed in 2008.