Since 1694, when the Bank of England was founded to act as the Government's banker and debt-manager, its primary focus has been to manage nation's currency and its financial well being by determing the base interest rates. 

Recently it lowered the base rates to their historic low of 0.5% - never done before by the Bank - EVER. This was done to help the nation, and its citizens to emerge from one of the severest challanges it faced for decades. Lower rates naturally help people meet their monthly mortgage payments on their home loans.

This should help home owners with their mortgage payments, right? 

Mortgage Payments
However most lenders have not dropped their own lending rates to match the BoE rates. However they have been lately showing resraint to their traditional keenness to repossess properties from people in financial difficulty, and struggling with loan payments.

Most courts in England and elsewhere in UK have at least one government appointed representative to advice those who are facing imminent repossession that there are other ways to stop the repossession of their house - short of selling. In some cases the lenders are accepting a renegotiated lower payments to give a chance to people to get back on their financial feet.

All these factors mean that more and more people facing hardship are being saved from losing their homes for non payment of their mortgage.

Government's Mortgage Rescue Scheme
Some observers believe although the above factors are helping the home owners, they are a temporary measure and UK is inching towards a repossession timebomb.

Government has good intentions and seemed to have persuaded the banks to give borrowers a chance rather than throwing the rule book in their face. It's well intentioned mortgage rescue scheme, meant to help hundreds of thousands of borrowes facing repossession has only helped six people in its first 6 months.

Mr Vince Cable of Liberal Democrates says: "The concept is a very good one, I support the principle, but the problem is they will only accept people who are regarded by local councils as homeless."

Which clearly means that people will have to wait for them to be evicted from their homes, or serious close to it, before they can get any help. And it does not stop there. People who have mismanaged their borrowings or finances under scheme's rules can not get help.

Repossession Timebomb
Low interest rates will not stay low for ever. Experts warn thet they will start to rise up sooner or later. By next year interet rates will be high enough for ordinary people to start getting anxious again.

Which means that the lower payments the struggling home owners have negotiated with their lenders will have to go up again.

This means that we will see far too many people getting in serious financial difficulties, and many may have to lose their homes to lenders.

We seriously hope that the time bomb never goes off but keeping all the above factors in mind, suspect that it is only a matter of time before it does.