Govt ‘doing too little’ in face of housing crash
The number of people losing their home rose by a fifth last year, as one of parliament’s leading economists predicts the figure will rise further in 2008.
Data from the Council of Mortgage Lenders (CML) show a 21 per cent rise in repossessions in 2007.
With 27,100 people losing their home, this brings repossessions to their highest level since 1999, with the CML conceding a further increase can be expected.
Lib Dem economic affairs spokesman Vince Cable accused the government of doing too little to prevent a housing crash, warning repossession orders risked rivalling the highs seen in 1993.
He said it was “inevitable” repossessions will rise further, as a result of higher borrowing costs and huge level of personal debt, and the UK now stands “at the brink” of another housing market crash.
Mr Cable argued: “For far too long this government has had a complacent attitude towards the housing market. Ministers have failed to put in place any preventative measures to stop a crash.
“It is critical that the government works with the banks to prevent large scale repossessions, not only for the benefit of the banks and borrowers concerned, but also to help keep the wider economy stable.”
Despite the 20 per cent rise, the effects of the impending credit crunch were less severe than first feared; in the autumn the CML was predicting up to 45,000 homeowners could lose their homes.
The CML concluded: “The impact of payment shock is likely to be more muted than previously expected,” credited to the Bank of England’s decision to cut interest rates.
But Michael Coogan, director general of the CML, cautioned: “The number of repossessions is likely to be higher in 2008 as a result of wider issues in the economy and the mortgage funding markets.
“Anyone who thinks they might be heading into difficulty should contact their lender, as problems are easier to resolve if they are tackled at an early stage. Lenders want to avoid repossessions just as much as borrowers do.”
