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Housing: Mortgages

Volume 716: debated on Tuesday 5 January 2010


My honourable friend, the Parliamentary Under-Secretary of State, Ministry of Justice (Bridget Prentice), has made the following Written Ministerial Statement:

On 29 December the Ministry of Justice published the consultation paper: Mortgages: Power of Sale and Residential Property. This fulfils the commitment to consult made in the July 2009 consumer White Paper, A Better Deal for Consumers: Delivering Real Help Now and Change for the Future, and follows concerns raised over the outcome of the High Court case of Horsham Properties Limited v Clark and Beech [2008] EWHC 2327 (Ch) .

The consultation paper proposes that lenders be legally required to seek a possession or sale order from the courts, or obtain the agreement of the borrower, before selling the borrower’s home to settle the outstanding mortgage debt. This will guarantee homeowners the opportunity to access the protections available from the court before their home is sold or repossessed. This will prevent possible abuse of the power of sale in the future.

The proposals would apply only to owner-occupied properties and would not affect buy-to-let and other commercial mortgage loans. The consultation paper does not extend to issues concerning the financial regulation of lenders.

Copies of the consultation paper have been placed in the Libraries of both Houses. The paper is also available on the Ministry of Justice website at

The consultation period will close on 28 March 2010.