As the recession takes hold there seems to be no end in sight for the increasing number of home repossessions that are taking place in the UK. According to the Council of Mortgage Lenders, the number of homes that are to repossessed has doubled in 2009 from a year ago to around 205 a day.  This trend is being bucked by the many financial institutions who are keen not to lose out in the wake of the credit crunch.

An undercover investigation, reported in the Times, revealed that a high street bank did not act sympathetically when dealing with borrowers who were in financial difficulty, instead taking an unforgiving approach. This in itself goes against the banking code. Furthermore, the report suggested that the very structure of the debt collection department was geared towards getting customers to pledge higher repayments than deal with the issues of affordability.

It is apparent that the need to recover funds from borrowers has been a driving factor behind the increase in home repossessions, so much so, that new companies are springing up to deal with the demand. In a British first, American style auction firms are flying across the Atlantic to hold mass sell offs of properties that have been repossessed. For example, the Real Estate Disposition Corporation (REDC), America’s largest foreclosed home firm, held its first auction in the UK recently. They hope to emulate the success of the business in the US and have even suggested that this move will help to stimulate the property market.

But perhaps companies such as REDC should be looking to set up shop North of the border first, as a report by BBC Scotland found that homes in Scotland could be more vulnerable to repossessions than in England and Wales. They suggest that Scotland fails to adopt the same legal measures as England, such as the pre-action court protocol, which has halved the number of repossession cases going to court.