Mortgage lenders should refrain from forcing sales in current market conditions

Mortgage lenders should refrain from repossessing properties and forcing a sale in current market conditions, according to the Homeowners Advice Centre.

Al Elliot, an adviser at the centre, recommended that lenders should start offering reduced repayment terms in exchange for a larger equity stake - which would allow them to sit back and wait for the UK property market to recover.

"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.

"It seems to me that it serves nobody's interest to possess and force a sale in today's market."

Price comparison website Moneysupermarket.com reported this month that 23 tracker mortgages had been withdrawn by lenders since the interest rate was cut to three per cent on November 6th.

It also found that 24 from 54 fixed rate bonds had been removed in the 24 hours immediately after the interest rate decision.

Mortgages News posted on 13/11/2008 18:07:45