Solicitors have warned that the new mortgage repossession pre-action protocal, which came into force last month, lacks bite.

The protocol, which attempts to encourage agreement between lenders and people at risk of repossession without the need for litigation, was hailed by the Ministry of Justice as a significant step in helping vulnerable familes.

However, solicitors have warned that the protocol could do little to halt the rising tide of repossessions.

Paul Marsh, President of the Law Society, said the pre-action protocol was “just a gesture”.

He went on: “While the idea to resolve arrears disputes at an early stage is welcome, there are no sanctions for lenders who fail to follow the protocol and there is no requirement for lenders to explain why they have rejected a borrower’s offer of payment. It lacks any bite.”

Paul Marsh said the protocol failed to close a loophole available to lenders intending to enforce their security on a residential property without obtaining a court order.

He said that in some cases lenders appointed a receiver to sell the property, causing the borrower who was originally occupying it to become a tresspasser.

Mr. Justice Briggs ruled in October in Horsham Properties v Clark and Beech (2008) EWHC 2327 (Ch) that this did not breach the borrower’s rights under the ECHR.

“As the number of mortgage possessions proceedings rise, there is more temptation for lenders to take this quicker route, particularly on buy-to-let mortgages”, said Paul Marsh.

“The government should introduce legislation to tackle this problem before it becomes more common because the courts have ruled they are powerless to stop it.”

Paul Marsh said the “slight advantage” that RBS customers would have with the six mouth pause before repossession proceedings is that they would have more time to consult solicitors.

He questioned the impact of the three month breathing space agreed by the other lenders after talks with Chancellor Alistair Darling.

Robert Latham, housing specialist at Doughty Street Chambers, agreed that the pre-action protocol was likely to have limited impact.

“Homeowners have inadequate protection under our domestic law,” he said. “The protocol simply indicates what best practise should be and will only work if lenders show some element of social responsibility.”

Derek McConnell, solicitor at South West Law in Bristol, said the pre-action protocol was useful in attempting to improve lines of communication between borrowers and lenders.

“It flags up the issues the parties should discuss, such as whether a customer should transfer to an interest only mortgage. However, if the lender refuses to consider the options, the protocol has no teeth.”

McConnell called for a fundamental review of the laws relating to residential mortgage occupiers.

“Courts need powers to prevent borrowers being unnecessarily evicted, for example where courts are satisfied that switching to an interest only mortgage would not cause financial detriment.

“Otherwise, if the recession really kicks in, we will see a return to the rate of evictions seen in the early 1990s and possibly more.

“Mortgage lending has become a more complicated process and the courts should be given the power to deal with it.”

However, John Gallagher, principal solicitor at Shelter, said that District Judges could use a failure by lenders to follow the protocol to adjourn repossession actions.

“It may seem very weak, but in the hands of some District Judges it could be made to work, “ he said.

Gallagher added that the Civil Justice Council was drawing up a questionnaire for lenders to show they had complied with the protocol, which could be introduced as soon as January.