Scots mortgages protection pledge

26/06/2009

Ministers claim Scotland will have tougher regulation on repossessions

The Scottish Government claims families north of the border will be better protected from the threat of repossession than those at risk elsewhere in the

.

As more and more Scots face the horror of losing their homes during the recession, the SNP administration at Holyrood has come under fire for “inaction” on the issue.

The Labour opposition has highlighted that

Scotland

is lacking a “pre-action protocol”, introduced in

England

and

Wales

in November last year to force lenders to negotiate with borrowers before taking them to court.

But leading Scottish ministers have pledged new legislation to make it much tougher for mortgage lenders to repossess homes, enshrining court action as the last resort. It follows a report to the Scottish Parliament from lawyers, debt advisers and consumer groups recommending action to assist vulnerable homeowners.

Asked if

Scotland

was behind the rest of the

in legal protections, Deputy First Minister Nicola Sturgeon said: “Absolutely not. Many claims have been made for the pre-action protocol in

England

, but it has no substantial effect. Unlike the protocol in

England

, we are offering something with real teeth.”

Housing Minister Alex Neil also told the Big Issue in

Scotland

claims the country was lagging behind were “absolute rubbish”.

He said: “We looked at how it worked in

England

, and in practical terms it’s not of huge benefit to people facing repossession. In any case, it’s not within out gift – it’s a judicial matter. What we can do is introduce far, far better protection that a protocol could, to make sure absolutely everything is done to treat repossession as a last resort.”

However, Scottish Labour said the attempted distinction masked a climb-down by the SNP as the administration sought to redress its oversight.

A spokesman for Labour said: “If they come forward with something that provides greater protection than in

England

, then they will get our enthusiastic support. But the problem is they’ve spent the last seven months saying there was already adequate protection and doing nothing. It’s a complete volte-face, and they haven’t actually outlined how it will work.”

Labour’s Cathy Jamieson claims that since November more than 500 new actions for repossession had been raised in Glasgow alone. She said: "I am also calling on Nicola Sturgeon to personally apologise to every family that has lost their home as a result of her inaction."

Labour also backs Govan Law Centre’s call for a commitment on free legal advice in mortgage repossession cases. A spokesman said: “People facing court action in

Scotland

aren’t entitled to the same automatic right to support as people in

England

.”

The Big Issue’s ‘Stop Repossessions’ Campaign highlighted the lack of Scotland-specific figures on repossession.

A spokeswoman for the Scottish Government said: “The Repossessions Group report recommended that the Financial Services Authority should require lenders to provide regional data to better understand trends in

Scotland

– we have called on the FSA to do just that.”

For more on the housing crisis and Scotland’s chances of meeting the 2012 target to wipe out unintentional homelessness go to page 20.