(Sharecast News) – The Financial Conduct Authority proposed on Wednesday to extend the ban on the repossession of homes of people unable to pay their mortgages due to the pandemic.
The current ban is due to last until the end of January but the watchdog is proposing it be extended until 1 April.
“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,” the FCA said. “We recognise that there are also government bans on evictions in some nations, which could also prevent firms from enforcing home repossessions.”
However, the FCA’s current guidance on consumer credit, which means that firms are not able to repossess goods and vehicles, will end on 31 January as planned.
“Our 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 said.
“For customers who remain in payment difficulties under a relevant consumer credit agreement, continuing to restrict repossessions may not be in their interests.
“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.”