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When everyone has a home

028 9024 5640: Housing & Debt Helpline for Northern Ireland

Report on proposals to increase engagement of those in mortgage arrears

The Northern Ireland housing market has been through a turbulent few years, with many households still experiencing negative equity, arrears and repossessions. To try and assist these households, the Behavioural Insights Team was asked by the Repossessions Taskforce to explore ways of encouraging borrowers facing mortgage arrears to take action earlier, either by seeking advice, engaging with their mortgage lender or attending their court hearing.

How to encourage borrowers facing arrears to take action early

The report sets out proposals on how to encourage borrowers facing arrears to take action early. Their suggestions focus on quite detailed comments about letters to borrowers, to higher level policy suggestions for the Departments for Social Development and other Government departments. They propose:

  • All correspondence should be kept short, include clear action points at the beginning, and be written in clear, plain English.
  • Correspondence from lenders should avoid sounding aggressive or pessimistic, instead encouraging borrowers to make contact to find a solution.
  • NI Courts and Tribunal Service’s documents should include a customer ‘road map’ to make it easier for borrowers to follow and engage with the legal process.
  • Highlight the prevalence of borrowers finding a solution if they seek advice.
  • Help people come up with specific plans to overcome likely difficulties.
  • Use text-message prompts to encourage people to open important letters.
  • The first point of contact between borrowers and banks is critical in setting the ongoing relationship. Banks should introduce processes to help customers during pre- or early-arrears.
  • Consider introducing new financial incentives for prioritising mortgage arrears.
  • Consider changing the policy landscape to offer a ‘middle route’ in which borrowers can stay in their home but relinquish ownership.
  • Raise awareness of debt and mortgage arrears to help overcome perceived stigma.
  • Map the customer journey to identify key ‘moments of change’ and decision points’ at which borrowers are most likely to be receptive to outreach.

Next steps

The implementation team of the Repossession Taskforce will consider the proposals in this report and consult with stakeholders to see how they can be put into practice.

Who are the Behavioural Insights Team?

The Behavioural Insights Team is comprised of ex-civil servants, psychologists, behavioural economists, marketers and policy specialists. They are consulting firm whose mission is to help organisations in the UK and overseas to apply behavioural insights in support of social purpose goals.

Read the full report

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Practical tips, Policy

This article was written on 21 May 2015. It should not be relied on as a statement of the current law or policy position. For help with housing issues please contact our helpline on 028 9024 5640 or use our online chat service at www.housingadviceNI.org.