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17 Nov 2008

Govan Law Centre's Dailly backs repossession bailout plan

Principal Solicitor at Glasgow's Govan Law Centre Mike Dailly has welcomed the Scottish Government's new shared equity scheme aimed at alleviating repossessions.

Borrowers who are facing problems paying their mortgage will now be able to apply for financial assistance. The Government would take a 25 per cent to 75 per cent stake in a property and cover mortgage payments for that share.  Homeowners would be able to buy back that portion of the holding at the market rate when they are able to resume their full commitment.

'We are delighted the Scottish Government is going to introduce a flexible shared equity scheme which was one of the three calls we backed last week with the cross-party Scottsh Parliamentary consensus," said Dailly.

"This is a good start and will undoubtedly help many households in Scotland although we believe it is only part of the solution'. 

'We would hope the Scottish Government will also take action to ensure court action against homeowners is a genuine last resort. That can be done with a pre-action protocol'.

'The Scottish Government has the power to regulate 'sale and lease back' under licensing law, and could also easily address the legal aid crisis for mortgage repossession cases - where even the very poor still face the prospect of paying for legal representation under the 'preservation of property' rules' and as a consequence often go without court help'.

'We hope the Scottish Government will take further action, as has been done in England and Wales, to provide a holistic solution for Scottish households'.