Debts & Loans

The number of people seeking advice relating to mortgages was up 50 per cent in the third quarter of this year, before the effects of a new deal to advise on the council's new mortgage rescue scheme are felt.

Overall, about 10,000 people contacted the bureau for advice in the eight months from April to December, compared to the same figure for the previous 12 months.

Plymouth CAB money adviser Steve Meakin said the people in danger of repossession had generally taken out their mortgages in the last two years, on short term deals - usually with American sub-prime specialists or British equivalents.

This means that pledges to work to avoid repossession by the UK's big lenders will have only a limited impact.

He said: "About 70 per cent of repossession cases are brought by seven per cent of lenders."

He said 1.4million households nationwide had come to the end of these 'low start mortgages' in the last year.

Mr Meakin, who is also chair of the Institute of Money Advisers, added: "Mortgage prices have not gone up - it's just that the cheap deals have finished."

In some cases, CAB can help families to access the mortgage rescue scheme, which Plymouth City Council has rolled out ahead of the national schedule as one of the government's 'fast track' local authorities.

This allows families to sell all or part of their home to a social landlord, and continue to live in it.

These deals are aimed at people that the council would have a duty to re-home, usually families.

"Above all we want people to stay in their own homes if at all possible," Mr Meakin said. "Repossession destroys families."

In other cases, simply taking advice early could allow people to save their homes.

Mr Meakin said: "Hopefully the lenders will have learned from the early 90s' that repossessing and dumping properties on the market under value does not make commercial sense. It causes a downward spiral.

"We are seeing a few people now who have given up hope. But there is hope - come and get advice. I'm not saying we can work miracles, but we have a variety of ways of helping people who want to help themselves."

He added: "CAB is about responsibility as well as rights. The cycle of irresponsible borrowing and lending had to come to an end - thank goodness it has. We just need to get back on track."

Mr Meakin said the other main areas of increase for CAB were employment law issues, and people seeking advice on work related benefits.

He said the change in benefit laws and the cutback in face to face advice in Jobcentres accounted for the later.

He added that as companies struggled, some were trying to cut corners and offer workers less than their statutory rights.

He said: "With rising unemployment, the balance of power between employers and employees has changed. Employers are seeking shortcuts. It's always the same in this situation."