Belfast Telegraph

Friday 1 August 2014

Repossession levels soar to 12-year high

With the housing market heading for its worst crash since the 1990s, and amid more ministerial confusion about a "stamp duty holiday", the Council of Mortgage Lenders reported yesterday that the number of people losing their homes has risen to a 12-year high.

Banks and building societies repossessed 18,900 homes during the first half of this year, a jump of almost 50 per cent on the same period in 2007.



The council forecasts that 45,000 homes will be repossessed by December as cash-strapped borrowers struggle to repay their mortgages. Many economists predict greater hardship in 2009, with repossessions approaching the record set in 1991, when 75,000 families lost the roof over their heads. The housing charity Shelter described the latest figures as shocking.



The number of families falling into arrears on their mortgage, the first step on the road to repossession, has also soared in recent months: the total number of mortgages three months or more in arrears has risen by 29 per cent to 155,600, and borrowers who default today are more likely to end up losing their home than those in the past.



About £15,000 has been wiped from the value of the average British home since the credit crunch began.



Shelter's chief executive, Adam Sampson, said: "Behind these figures are thousands of families facing sleepless nights worrying about how to make their next mortgage payment. Many thousands more will be waking up to the frightening reality of repossession. The Government urgently needs to step in."



Caroline Flint, the Housing minister, acknowledged that homeowners were having a "tough time", but she failed to put an end to speculation – caused by a government leak – that stamp duty may be suspended to boost the ailing housing market.



Ms Flint told GMTV: "I have said on a number of occasions that we are looking at all the options and stamp duty is one of them, but I've also always said that stamp duty and removing it in itself may not kick-start the market in the way that people think it might. Stamp duty ... represents a small amount of the upfront costs, so we have to look at all these issues."



She refused to confirm or deny that a duty freeze would form part of Gordon Brown's economic recovery package, expected in September. In other interviews she has said that government would not be "bumped into making a decision before the pre-budget report", usually in October.



Ms Flint was keen to stress the new emergency legal aid schemes for people facing repossession: "What we have done is put £10m behind more debt advice for people - 90 per cent of our county courts now have free legal advice and we know that if people get the right advice something like 85 per cent of repossessions can be avoided. But we are also looking at more ways in which we can help people facing difficulties."



Official statistics on repossessions coming though the courts system were due to be published yesterday by the Ministry of Justice, but have been delayed for a week "due to a temporary problem with the computer system".



The political row seems likely to continue. Philip Hammond, a Tory Treasury spokesman, said: "The government's position on stamp duty is a toxic combination of chaos and denial," said. Vincent Cable, of the Liberal Democrats, added: "The Government must create a statutory code of practice to ensure that lenders only ever repossess as a last resort, if we are to avoid the mass repossessions we saw during the Tory recession of the 1990s."

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