The rising number of repossessions is the forgotten issue of the pre-election campaign.In a different world, this incredibly insightful piece of research by the housing and homelessness charity Shelter would be front page news.
Referring to 1971 as a starting date, Shelter discovered that if food and other essential items had gone up as fast as the average property price, a box of washing powder would now cost £28-53, a jar of coffee over £20 and a pint of milk £2-43.
Would you put up with that? Well, we certainly did with house prices.
Unaffordable housing has been one of the most neglected issues of the pre-election campaign.
The news is full of stuff like Nick Clegg wanting to join salsa classes with David Cameron rather than Gordon Brown. But in the meantime, homes cost way more than they ever did in history and the paradox is that if prices don't keep ballooning, "financial experts" call it a tragedy.
Yet, the impact of inflated property prices has proven devastating.
There were 40,000 properties repossessed in 2008. Last year, the official number went up to 46,000 -an average of 126 repossessions a day. That's around 200,000 people going through a heartbreaking ordeal of not knowing where they're going to sleep the next day and where they're going to put their things.
However, the figures don't even show the full picture. Like some analysts noted, anti-downturn measures such as the Mortgage Pre-action Protocol have merely deferred the inevitable, meaning that repossessions that weren't allowed to take place in 2009 will anyway within a year or so.
More importantly, no-one has taken into account the dodgy 'Sale and Rent Back' schemes, which the Financial Services Authority (FSA) only recently regulated. Their significance added an extra 25,000 lost homes to the 2009 figures (read more here).
Two months ago, it was revealed that around one million people had to rely on credit cards to help cover their mortgage or rent in 2009.
2 comments:
According to this report, in 2004 there were 860,000 empty homes across the UK. This was at a time when the hidden homeless population was around 400,000. I suspect that buy-to-let and second properties also run into the hundreds of thousands.
This is one of the areas where taxation could make a real difference. If it were less affordable to own a second home then less people would do it. Not only would the taxation subsidise the building of more Local Authority housing but reduced demand for overpriced housing would bring the cost down.
I personally think that the property 'boom' is a significant contributor to the wealth divide. Those who were fortunate enough to own their property before it started will always be better off than the people unfortunate enough to be born 20 years later. If only we could just get back to thinking of houses as homes instead of a high-earning pension plan.
I concur with Ben E's comment above.
This is a political problem as well as a cultural one. The way home ownership was peddled as the be all and end all of one's life, regardless of all the risks associated with it.
Something that is rarely mentioned regarding Thatcherism is the boom in repossessions that followed the right-to-buy orgy of the early to mid 1980s.
The pro-Tory tabloids may love to go on about dodgy council estates but they're never going to question how and when the dilapidation and underfunding began.
Labour continued along the same lines. The property bubble and speculation was actively marketed as inherently good and copious quantities of blinkers were handed out whenever anyone highlighted the huge dangers associated with it.
I would love to see comparative figures for repossessions. IMHO a first-world self-professed civilised country cannot allow repossessions to take place at such a level.
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