Centre for Housing Policy

The impact and management of mortgage arrears

Report (July 2009): Ford, J. and Wallace, A. Uncharted Territory? Managing mortgage arrears and possessions, London: Shelter. DOWNLOADS: REPORT SUMMARY

The recent rapid loss of liquidity in the mortgage market (the credit crunch), the rapid fall in house prices, and the fall in housing market transactions, all have profound implications for both the extent of mortgage arrears and possessions and for their management by lenders and borrowers.

This researchl aims to provide a level of evidence about the current experiences and responses to mortgage arrears and possessions by both borrowers and lenders, sufficient to provide the basis on which to identify and evaluate of the likely effectiveness of policy responses. The key questions and approach proposed are outlined below.

• What are the key drivers of currently rising arrears and possessions and how do they differ from previous recessions? How do the influences on arrears and possessions interact and with what impacts?
• What strategies do lenders have for managing arrears and possessions in these changed circumstances? What is shaping these strategies and what are the likely short and medium term consequences? How do lenders communicate the provisions of the new schemes to both borrowers and front-line staff and how do their recovery practices accommodate the additional safety nets?
• How do borrowers shape their management of arrears, what are the key constraints they face, how do they interact with lenders and the new schemes, and with what outcomes? Are there particular borrowers who are not benefiting from the enhanced safety net provision?
• Are there any additions or amendments to the range of potential policy options and interventions, both short and medium term, that might be considered and the likely impact of each?

Centre for Housing Policy
University of York, Heslington, York, YO10 5DD, UK
Tel: +44 (0)1904 321480 |  Fax: +44 (0)1904 321481 | chp@york.ac.uk