Rise in repossessions blamed on equity loans

Court orders up 34% in 2005 as borrowers use home loans to service debts

News, 24 May 2006

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The number of repossession decrees issued in Scotland last year increased by 34%, according to figures obtained by the SNP.

The rise is being blamed on increasing numbers of loans secured against borrowers' homes. In 2005, there were 6,285 repossessions dealt with by the Scottish courts, as opposed to 4,694 the previous year.

The SNP's justice spokesman Kenny MacAskill said the people most affected were those in the "sub-prime" lending market - people on low incomes or with poor credit ratings.

He claimed that the Scottish Parliament had no powers to get to the root causes of the "debt epidemic". He also criticised the proposal in the current Bankruptcy and Diligence (Scotland) Bill to permit a "land attachment order" against a debtor's home for any debt over £1,500.

A spokesperson for the Scottish Executive said the figures should be treated with caution because not every repossession decree led to an eviction order. Creditors were required to inform local authorities before taking possession, to prevent homelessness where possible.

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