In a move sure to be welcomed by homeowners, The Royal Bank of Scotland is to announce today that they are to offer more leeway in terms of how long borrowers can be in arrears before they issue repossession proceedings.

RBS are expected to announce today that they will now grant homeowners six months of arrears before they proceed with repossession proceedings, which is twice as long as the period requested by the government. This move comes just a few days after the government spent £15 billion of the taxpayer’s money on shares of RBS.

It’s expected that the other two big mortgage lenders in the UK, Lloyds TSB (through Cheltenham and Gloucester) and HBOS will come under pressure from the government to follow suit.

Stephen Hestor, the chief executive of RBS, stated:

We are conscious that many people face anxiety about whether they will be able to continue to make payments on existing mortgages. We need to rebuild our strength, to work closely with government and the communities we serve, and achieve a fair balance between the interests of the borrowers and savers we support.

Hestor has readily admitted that the banks have made mistakes in the lead up to the current financial crisis, but hopes that this move will go some way to assist customers through the problems.

We banks recognise the part we have to play in the downturn ahead. Just as we need the support of customers to return to health, so too do our customers need support from us. Not because of any moral pressure – although we understand it – but because it makes commercial sense.

Before the collapse of the share price in September, RBS was the country’s second biggest bank. The cash injection from the government has seen a slight recovery of the share price in the last week, but shareholders are still concerned following what happened to Bradford and Bingley just a few months ago.

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