The letter advises that the modest reduction in mortgage arrears and repossessions is deeply dependent on low interest rates and the public policy measures that currently apply. The new Government needs to make a long term commitment to help those borrowers in most need.
Adrian Coles, Director General of the BSA said:
"The current support schemes in place were implemented as temporary measures due to finish at the end of the year. Furthermore, with a new Government in place, there is a risk that the schemes could be pulled early, resulting in many homeowners being left with no safety net.
"Building societies and mutual lenders are committed to working closely with borrowers in financial difficulty to help resolve their financial situation. However, for many homeowners, their financial situation remains fragile and they are reliant on support from the Government to help them remain in their home.
"We believe it is important that these measures remain in place to help those at risk of repossession and that there is a real need to commence work on implementing a long term support programme."
Campbell Robb, chief executive of Shelter said:
"Hundreds of thousands of homeowners desperately need the new Government to continue the help that enables them to keep their home. Current support schemes in place are set to wind up at the end of the year but could be pulled at any time, which will leave many people with no safety net and facing the real possibility of repossession.
"These schemes are directly helping homeowners everyday and there is no question they are making a real difference. If the funding for these schemes is not urgently reconfirmed the new Government are likely to see a huge number of people losing their home by the end of the year."
A new survey released by Shelter today shows 29% of mortgage holders are unprepared for the increase in mortgage payments when interest rates inevitably rise.
Mr Robb continued:
"5.4million mortgage holders haven't even thought about how they will pay their mortgage if interest rates go up. We know for a significant number of people, just keeping on top of their current mortgage repayments is a constant struggle.
"If we don't extend these schemes soon, these people will simply have nowhere to turn when times get really tough, particularly if the extra advice funding is cut at the same time demand increases.
"One of the new Government's first actions must be to extend these schemes to help the tens of thousands of people at risk right now and start working on a long term homeowner support programme."
