The scheme will be launched on June 18, 2007 and will give assistance to current SAM customers who find themselves in substantial hardship that requires them either to move house or make adaptations to their existing property. 

Hardship is defined in general as poor mobility or quality of life caused by illness, disability, age or other factors.  The Hardship Scheme will offer eligible customers two options:

1)      For those who wish to move - an interest-free, and payment free loan, allowing them to settle their SAM and assisting them in buying a new, more suitable property.  In most cases this loan will be repayable either on sale of the property or the death of the SAM holder. 

2)      For those who wish to remain in their current property - the award of a ‘grant’ to carry out specific adaptations that are required to improve the customer’s quality of life and make the property suitable for their changed needs. This grant will be a one-off award and customers will not be expected to pay it back even when the SAM is eventually redeemed.
 

Commenting for Barclays, Catharine French, UK Retail Banking Customer Services Director said. “We recognise that some Shared Appreciation Mortgage customers have seen their properties increase in value at a rate far above that anticipated by anyone back in 1998. 

For some this, together with the SAM not being portable, has unfortunately resulted in situations of hardship.  We have launched this scheme after listening to feedback from our customers, MPs and SAFE and we are confident that it will help affected individuals and families.”   

Speaking for consumer action group SAFE, Elaine Williams said: “We are delighted that after years of lobbying the two banks who sold SAMs back in the late 1990’s, we have made such good progress with Barclays.  Today’s announcement will help many of the SAM customers registered with SAFE who are suffering real hardship.  This vindicates our persistence and shows that some banks do listen to customer concerns and take the right action.”   

Alan Keen MP, Vice-Chair of the All-Party Parliamentary Group against Financial Exploitation, said: “The All-Party Group has worked hard to raise the profile of consumers who find themselves in financial difficulty, for whatever reason.  This scheme represents a real step forward for Barclays SAM customers, and I commend the effort, from both Barclays and SAFE, that has gone into establishing it.  I also welcome the senior-level engagement we have had from Barclays in developing the scheme.”

-Ends-

Notes to Editors:

§          Barclays Shared Appreciation Mortgages were sold between May and July 1998. 

§          In return for nil repayments on their loan, customers agreed to repay on sale of their property the original sum borrowed, plus a percentage of the house price increase (equity) up to a maximum of 75%. 

§          If house prices had fallen customers would have paid back only the original sum borrowed. 

§          The housing market has grown at an unprecedented rate over the 9 years since the product was sold.  According to Halifax HPI 1998-2007 Q1, the average property in the SAMs portfolio has increased in value by 150%.  This means that the share of the equity required to settle the SAM is in most cases a substantial amount of money, far exceeding original estimates. 

§          Today, Barclays has around 2,500 SAM customers.

§          The hardship Scheme will run until the last SAM has been redeemed.

§          From 18 June, Barclays will proactively write to those SAM customers who have been in contact in the past to complain of hardship.

§          SAM customers who think they may be eligible for the Hardship Scheme should ring 0800 023 2981 (lines open Monday 18^th June) or call SAFE on 0208 630 9990

§          SAFE (Struggle Against Financial Exploitation Limited), which is also the Secretariat to the All Party Parliamentary Group Against Financial Exploitation in the Commons, Chaired by Lord Ahmed and Vice Chair Alan Keen MP.    Contact SAFE on www.safe-online.org or 0208 630 9990.

 

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