The housing charity “Shelter”, says lenders are not following agreed guidelines aimed at limiting repossessions.

Last year a “pre-action protocol” was agreed which laid out the ways lenders should assist borrowers before starting repossession proceedings. But it seems that as the guidelines are just that – guidelines not imbedded in law, they are being ignored by the lenders and some courts.

In Shelter’s survey which was run in conjunction with The Citizens Advice Bureau and National Debtline, it was found that just less than a half of mainstream lenders were observing the pre-action protocol. The very worst were the sub-prime lenders lending to people with impaired credit ratings. Here only one fifth were observing the protocol.

Shelter said, “These people are already the most vulnerable and should be the borrowers most seeking the protection of the protocol”.

But it is not only the lenders who are at fault, the courts also come in for critism. Three out of every four Judges were asking the lenders for more information about the efforts they had undertaken to sort out the borrower’s financial problems. But despite that, repossessions had increased by 23% beteen the last quarter of 2008 and the first quarter of 2009.