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Fury as housing minister claims repossession can be ‘best option’
Housing minister John Healey has provoked fury among industry figures, after claiming that repossession was the best option for some people.
Last week, figures from the Council of Mortgage Lenders (CML) showed that 46,000 homes were reclaimed last year as repossessions hit a 14-year-high.
The figures represented an increase of 15% on 2008, despite a slight improvement in Q4.
The trade body issued a warning that some households will inevitably find that their finances will be squeezed in 2010. It predicted that 53,000 properties will be taken into possession next year, as a result of an uncertain economic and political outlook.
However, Healey, speaking on Radio Five Live, claimed that repossession was a good option, so people could cut their losses and not fall deeper into debt.
He added: “Repossession might be the only way they can get their finances and lives back on track. Sometimes it is impossible for people to maintain the mortgage commitments that they have.”
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Among those who criticised Healey were Grant Shapps, the Conservative shadow housing minister and Campbell Robb, chief executive of Shelter, who said it was a tragedy for the 46,000 people who have had lost their homes in the last year.
Robb added: “Behind each one of these numbers is a heartbreaking story of a family losing their home and having to rebuild their lives. It can never be the best option to lose your home.”
Research from repossession specialists Moore Blatch Solicitors backed up the CML’s views of further repossessions in 2010, when its annual report revealed that 67% of lenders predict an increase this year.
Brian Murphy, head of lending at Mortgage Advice Bureau, said that a rise in interest rates would lead to more arrears and repossessions.
He added: “It is essential that anyone who is beginning to struggle with their repayments gets in contact with their lender straight away in order to find a solution. The worst thing to do is stick your head in the sand.”
Sarah Teather, Liberal Democrat shadow housing minister, added that various Government initiatives were not helping repossessions after it was revealed that the Mortgage Rescue Scheme only helped 276 households in January 2009.
She added: “The courts need to be given more powers to intervene in repossession cases so that it is only ever a last resort. With the Mortgage Rescue Scheme only helping a tiny fraction of those in need, the Government needs to get its act together and fast.”