"We recognise that there are also government bans on evictions in some nations, which could also prevent firms from enforcing home repossessions."
In November 2020, the FCA announced further support for mortgage and consumer credit borrowers experiencing payment difficulties as a result of Covid-19.
This included guidance that firms should generally not enforce repossessions before 31st January 2021 except in exceptional circumstances, such as a customer requesting that proceedings continue.
The FCA is now proposing to extend this guidance so that firms should not enforce repossessions before 1st April 2021.
In a statement, the FCA said: "This approach takes account of the worsening coronavirus situation and the government’s tighter coronavirus-related restrictions which mean that consumers could experience significant harm if forced to move home at this time as a result of repossession proceedings. We recognise that there are also government bans on evictions in some nations, which could also prevent firms from enforcing home repossessions."
The FCA is not extending its consumer credit guidance, which means that consumer credit firms will be able to repossess goods and vehicles from 31st January 2021.
The FCA says its proposed approach "reflects the different risks and harms that customers with goods or vehicles on credit are likely to face compared to those who are at risk of losing their home".
It added that for customers who remain in payment difficulties under a relevant consumer credit agreement, continuing to restrict repossessions "may not be in their interests".
The FCA added: "The shorter terms and higher interest rates on these agreements, combined with the depreciating value of the goods or vehicles, means that they could end up owing more in the long term if repossessions are prevented.
"Our approach, therefore, takes appropriate account of the risks to customers of further asset depreciation, whilst providing appropriate protections by ensuring that firms repossess only as a last resort and also consider the impact of repossession action on those who are vulnerable, as well as following relevant government public health guidelines and regulations when undertaking repossession action."
