Housing Minister John Healey answered questions on housing repossessions and the government help available for households struggling to meet mortgage repayments.
- Read more about mortgage support for homeowners
Read the transcript:
John says: Hi – good to be taking part in this web chat today – and sorry I’m a bit late. I’ve been out this morning meeting a family who live near Greenwich who were helped by Mortgage Rescue. Was good to see the difference it’s made to them being able to stay in their home.
alan phillips: Is reposession a price worth paying?
John replies: Repossession is something all of us would always want to avoid, and our government help during this recession has been designed to make it a last resort in all cases. But for some people allowing their home to be repossessed may be the only and best option – allowing them to cut their losses, not get into deeper debt and lift some of the burden they’ve been struggling with. Debt advisers sometimes work with people on this basis and any household facing repossession should always seek free independent advice – you can find out about help available from www.direct.gov.uk/mortgagehelp. But the main thing for me is that people know the help that’s available and that every other option is tested first.
gerallt jones: Last year I was eviceted because my landlord was not pay his mortgage, i was given a week notice and I was made homless ( myself my wife and our 2yr old), my question to the minister is, how can youstop this from happening and give the tennant some legal rights? eg. make the bank the landlords
John replies: There’s a gap in the law at the moment, so you as a tenant of a landlord not paying his mortgage may not have known about this, his mortgage lender may not have know you were a tenant and you have no legal right to notice period if the lender does move to repossess. So we’re backing legislation in Parliament at the moment to close this gap – it’s been through most of its Commons stages and I hope we can get this protection on the statute book soon to avoid others being in the same position as you.
alastair bishop: How can we encourage lenders to continue to exercise forebearance with families who get into financial difficulties when house prices start to rise and it becomes more profiatable for them to repossess and mortgage homes
John replies: Lenders have been doing their bit in the last year. The rules we have in place now, unlike the last recession, means repossession has to be a last resort. But with pressures on people’s finances and on mortgage payments set to continue we’re also tightening the regulations on lenders still further through the Financial Services Authority. So it’s always a last resort and all other options including government help schemes have been looked at before moving to repossess.
David Westgarth: John, some 40,000 people were forced to hand in their keys in 2008. With increased unemployment and resulting tightening of budgets and incomes, what figures can we expect for 2010?
John replies: We know pressure on jobs and family finances will continue at least through 2010, whatever the growth in the economy. So we’ve stepped up our campaign to promote the free impartial advice available for people who are struggling. On figures, I think we can expect repossessions to continue at a similar level to those announced today by the Council of Mortgage Lenders, who expect this too but said their earlier predictions of rises in 2010 may have been to “pessimistic” because of continuing lenders’ flexibility and government help. The most important thing for me is that no-one talks of cutting the support in place, and that we look to tighten it further where we can … which we’re doing.
debtadvisorne: Interested to know a live example of how it helped them in real terms?
John replies: Paul and Maggie in Plumstead – two children, 4 and 13. I was with them this morning. They had a repossession order facing them and got help via their local authority onto our government Mortgage Rescue scheme – which is a backstop scheme when all else fails. It took four months but the bank backed off, they had independent advice and now they’re still in their own home but as tenants paying about half the amount each month in rent, not homeowners going under with the burden of mortgage repayments – and they have the option to buy back, if their fortunes and finances improve.
debtadvisorne: You’ve been to see a family today, how many families have been helped since the launch of the mortgage rescue scheme.
John replies: Paul and Maggie are those helped at the back end of the scheme … more than 270 familes across the country by the end of December helped in this way; but the Mortgage Rescue scheme’s front end has helped many more … 15 000 plus have had free advice from their local authority and they’ve put other arrangements in place; and almost 1300 have had repossession action stopped as part of the scheme.
Matt Hutchinson: Undoubtedly more people would be repossessed without the lifeline provided by taking in lodgers. Do you agree with the Raise the Roof campaign (backed by Shelter) that the Rent a Room scheme threshold should be raised to encourage more people to take in lodgers? – https://webarchive.nationalarchives.gov.uk/20100511084732/http://www.spareroom.co.uk/raisetheroof
John replies: Thanks Matt – that’s an interesting idea and I know it makes a real difference to lots of people if they can rent out a spare room to get some extra money coming up. Happy to look at this in more detail if you want to write in to me with details? The address is John Healey, Minister for Housing and Planning, Department for Communities and Local Government, Eland House, Bressenden Place, London, SW1E 5DU.
Rona: I helped clients last month when GE Money insisted on court action despite a fair arrangement offer being on the table, they refused went to court and the judge agreed that the offer was fair and issued the order accordingly, but this has meant clients have increased court costs, continuing fees added to the arrears. When are the Government going to put a strategy for dealing with clients in arrears to all lenders and make them all comply, even the more adverse lenders.
John replies: Thanks Rona – I’m glad that in that case your clients were able to get help and agree it’s really important everyone gets a fair chance regardless of who their lender is. The Courts have put in place a new set of rules called a Pre Action Protocol which means that in every case the Judge has to check whether the repossession case is really a last resort.
Chris Bingham: Hi John, do you agree that the pressure to minimise reposessions is only delaying an economic reality which will just end up worse for the delay?
John replies: Thanks Chris. The important thing is for families to get independent advice on what’s right for them – every case is different and that’s why the work of citizens advice, shelter and others is so important – there’s certainly no one size fits all solution.
I’m afraid I’ve got to rush off to catch a train. Sorry I couldn’t stay longer and answer all of your questions. If anyone wants more information please do go to www.direct.gov.uk/mortgagehelp – it has lots of info on help available and contact numbers for debt advisors like National Debtline and Consumer Credit Counselling Service.