Richard Banks - chief executive for UK Asset Resolution (UKAR) - stated in an interview with the Guardian that the Labour government's requests at the beginning of the crisis to have the banks help out owners in troubles as actually pushed some people even more in debt.

A lot of home owners have been battling with monthly mortgage repayments. With the recent state of our market, interest rates are bound to rise which means bigger monthly repayments. Obviously with bigger monthly repayments, more and more people are also bound to fall into arrears.

As if the outlook for homeowners was not already dark enough; Richard explained that a little tough love was needed now meaning that the lenders will have to tighten the belt and look at the matter objectively. The banks would then “be fair to homeowners” and would repossess their home so to clear their debt. Tough love indeed.

This debate has all came about when UK Asset Resolution chief executive uttered a warning stating that there may be a bunch of house repossessions to take place should interest rate will rise in the near future. UKAR, in an attempt to prevent further problems, is now calling customers it believes at risk of becoming late on their repayments.

However, this would likely affect house buyers as well as we would expect the banks to become even more strict with new applications. Depending on their income or salary, if the lenders are going with a strict version of ‘fairly’, not very many people may not be able to be a home owner after all. At least these won’t have to face repossession!