Action to save Homes from Repossession
Following the news that mortgage repossessions in Northampton look like reaching a 10 year high, Andrew Simpson, the Liberal Democrat Parliamentary Candidate for Northampton North constituency, has backed plans that could save many residents from the trauma of home repossession. With the credit crunch biting, many households are struggling to keep up mortgage payments and risk losing their homes.
Liberal Democrat Shadow Chancellor Vince Cable MP launched the plans on 27th August that could stop many people being thrown out of their homes because of the growing mortgage crisis.
Andrew Simpson said, "We have seen a 51% increase on last year on mortgage repossession orders in Northampton. The fear of repossession is stalking many homeowners and the Labour government is not doing enough to protect people from the worst effects of the mortgage crisis.
"People who lived through the last mortgage crisis under the Conservatives will never want to experience the same situation again. That is why I am pleased that Vince Cable MP is putting forward these plans."
The Liberal Democrat proposals include:
• allowing families struggling with repayments to sell all or part of the equity in their house and rent it back from a housing association or private firm to help keep them in their home;
• letting councils and housing associations borrow money to buy up land and empty new homes for use as social housing ;
• giving guidelines to courts to allow homes to be repossessed only in extreme circumstances, making the mortgage lenders' voluntary code binding on all lenders.
Vince Cable MP said, "The Government seems obsessed with fighting a losing battle to artificially prop up the housing market, rather than finding ways to deal with its worst effects. Ministers must act to help the thousands of families struggling to keep a roof over their heads."
Notes to Editors
See latest Q2 repossession order figures for Northampton at:
The Liberal Democrats are due to debate these proposals at their forthcoming autumn conference. The full text of the conference motion is copied below:
Conference notes that:
i) House prices have continually fallen since last autumn, with further falls predicted, putting millions of people into negative equity.
ii) 1 million households spend more than two-thirds of their income on housing according to a recent survey by Shelter.
iii) The number of repossessions and repossession claims have more than doubled in the last five years, reaching a 15-year high in 2007.
iv) Under this Government the social housing safety net has dwindled from 4.386 million social homes to rent in England in 1997 to just 3.936 million social homes in 2006 while the number of households on social housing waiting lists has risen almost 70% to 1.67 million and notes that the Local Government Association predicts that this could rise to 2 million households by 2010.
Conference supports the policies passed in conference motion Homes for All in spring 2008 to increase the supply of sustainable social and affordable housing.
a) The current dramatic falls in house prices are the result of an unsustainable bubble that formed in the housing market fuelled by irresponsible lending.
b) Throughout the period of unsustainable growth in the housing market the Government made no attempt to deal with the housing bubble, or to crack down on irresponsible levels of lending.
c) That while it is not the job of government to prevent house prices falling to a more affordable level, it is not in the interest of the economy as a whole if negative equity and repossession leads to large numbers of people becoming homeless and over-indebted.
Conference therefore calls on the Government to:
1. Allow councils and Registered Social Landlords to borrow against their assets to buy up unsold properties and sites from building companies in order to replenish the social housing stock, to deal with the current 1.67 million households on social housing waiting lists.
2. Introduce a statutory Code of Practice for mortgage lenders to ensure that repossession is the only ever the last resort - all borrowers in arrears should be offered:
a) Free independent financial advice.
b) A chance to renegotiate the terms of their mortgage.
c) An opportunity to sell equity in their home to a Registered Social Landlord (RSL) and become part-tenants of that landlord, dependent on meeting the requirements of the RSL.
3. Protect vulnerable homeowners against rogue doorstep companies by regulating the private 'sale and leaseback' market as a financial service through the Financial Services Agency.