"We recognise that repossessions can be difficult and stressful but delaying repossession can lead to poor customer outcomes as a result of increased balances and equity erosion."
In an update to its draft guidance, the FCA said that firms can only enforce repossessions "if they act in accordance with our guidance and regulatory requirements which mean that repossession should only take place as a last resort if all other reasonable attempts to resolve the position have failed".
Firms will also need to comply with any relevant legislative requirements which may prevent firms from enforcing repossession in certain parts of the UK.
In a statement, the FCA said: "We recognise that repossessions can be difficult and stressful but delaying repossession can lead to poor customer outcomes as a result of increased balances and equity erosion. This is why we propose to allow firms to repossess homes when it is fair and reasonable to do so."
For consumer credit and mortgage consumers, the deadline for new payment deferral applications will remain the 31st of March.
Only consumers still in a payment deferral on 31st March will be able to extend their payment deferral beyond that date. All deferrals under that guidance will end by 31st July 2021 at the latest.
The FCA says that from 1st April 2021, borrowers who are newly impacted by coronavirus, or find themselves impacted again, should receive support from their lender in the form of tailored support. This could include short-term support such as a payment deferral, if it is appropriate, although this would be subject to normal credit reporting.
The FCA added: "Demand for payment deferrals has reduced and firms now have the capacity to offer both shorter and longer-term support. That support should provide better outcomes for consumers as it includes a wider range of options and is tailored to their individual needs."
