Call to help struggling East Lancashire homeowners in negative equity (From Lancashire Telegraph)
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Call to help struggling East Lancashire homeowners in negative equity
4:50pm Wednesday 4th July 2012 in Hyndburn
By Bill Jacobs, Local government reporter
HYNDBURN MP Graham Jones has demanded more help for East Lancashire home owners whose mortgage is bigger than the current value of their property.
He has asked junior housing minister Andrew Stunnell in the House of Commons: “What assessment have the government made of the level of negative equity in the north of England?”
Mr Stunell replied: “A Council of Mortgage Lenders report in 2011 suggests that, as of the first quarter of that year, 827,000 UK households were in negative equity. That includes nearly 300,000 in the north of England. The organisation also reported that there were 36,200 repossessions that year — the lowest annual total since 2007.”
Labour backbencher Mr Jones then asked Mr Stunnell: “In its report on home ownership, Standard & Poor’s says that rates of negative equity in the North West and the North East are four times higher than those in London.
“Obviously those areas were disproportionately hit by the Government’s cuts, and unemployment is rising.
“There are hard-pressed families in these regions struggling to pay their mortgages.
“What help is the Minister going to give them?”
Liberal Democrat Mr Stunell said: ”I remind you that negative equity becomes a problem if people cannot pay their mortgage. Mortgages are affordable at the moment because of the fiscal and financial policies that this coalition Government are pursuing.
“ Interest payments on mortgages are at the lowest level as a pro-portion of total income since records began.
“I invite him to consider how many repossessions in the north of England would result if we had the bond rates of the Italians or the Spanish, and therefore how important it is for this Government to remain steadfast on their fiscal programme.”
Comments(10)
2 for 5p
says...
5:48pm Wed 4 Jul 12
As far as homeowners are concerned when they bought thinking they were getting one over on everyone else. They must of known that prices go down as well as up. Now there's talk of government money to help them out.
OK want it that way anyone who bought and made a profit give a share to the government.
Please don't be so uperty to expect others many who rent to bail you out.
Michael@ClitheroeSince58
says...
6:47pm Wed 4 Jul 12
BuckoTheMoose
says...
8:02pm Wed 4 Jul 12
Why I took out my mortgage I never thought for a minute that the taxpayer should bail me out if things get bad.
You pays your money, you takes your chance.
Michael@ClitheroeSince58
says...
8:05pm Wed 4 Jul 12
mavrick wrote:I agree partly with what you are saying but the truth is the Genie is not even out of the bottle yet, once this problem with the banks is out of the way watch what the Genie really will do when let fully out of the bottle. Market forces can not be stopped we live on a island, one of which most the world seems to want to live it's onwards and upwards only the week will fall now. it's dog eat dog for them ;)
I would investigate the high rent levels in the social housing sector, It seems that a cartel of social housing landlords are becoming remote and out of touch, indeed in some cases I would suggest they are no cheaper or better than the private sector. I believe they have been left unaccountable for too long.
As for repossessions being higher if we had Italian or Spanish bonds, I wonder why? is it not in the best interest of the mortgage lender to come to an arrangement with the borrower, or is there a hidden scandal in home repossessions and the sell on at a knock down price. could there be some collusion?
The main trouble is Housing was allowed and encouraged to rise in cost far beyond a sustainable level. we simply priced our children out of buying a home and the banks and building societies were the winners for a long time.
Michael@ClitheroeSince58
says...
8:23pm Wed 4 Jul 12
jack daniels
says...
8:45am Thu 5 Jul 12
Kevin, Colne
says...
8:54am Thu 5 Jul 12
In the latter stages of the 2001-2007 house price boom many lenders abandoned all sane lending criteria. If I said that you could get a mortgage simply by fogging a mirror this would be over-stating the case, but not by much.
High rates of LTV were commonplace and a great many, if not the majority, of mortgages during this later period were granted on the basis of interest only with nary a repayment vehicle in sight; other than some vague idea – hope - of accessing the appreciation in the price of the house at the end of the mortgage term.
A high level of gearing works wonderfully when credit is plentiful and the price of the asset of choice – in this case housing - is rising, but there exists a reverse gear and when asset prices are falling the gearing will have the same geometric ruthlessness and completely destroy the equity stake of the mortgage-holder.
I suspect that lenders and mortgage brokers would either fail to mention this latter point to prospective borrowers or gave the matter a cursory mention in the belief that stagnating or falling house prices was an idea that was so outrageous and preposterous that anyone who urged caution was considered to be insane and should be ‘sectioned’ under the Mental Health Act, 1983.
jack daniels
says...
10:39am Thu 5 Jul 12
People can't pay their mortgages because they have lost their jobs or are on less money. This is because the Tories have failed to restart the economy and have left the North to rot, like they always do
MrPatM
says...
10:12pm Fri 6 Jul 12
mavrick says...
5:15pm Wed 4 Jul 12
As for repossessions being higher if we had Italian or Spanish bonds, I wonder why? is it not in the best interest of the mortgage lender to come to an arrangement with the borrower, or is there a hidden scandal in home repossessions and the sell on at a knock down price. could there be some collusion?
The main trouble is Housing was allowed and encouraged to rise in cost far beyond a sustainable level. we simply priced our children out of buying a home and the banks and building societies were the winners for a long time.