Thursday, Feb 11, 2010
A surprising admission by John Healey...
BBC: Repossession can be 'best thing' says housing minister
... but his Tory opposite number is still waving the Home-Owner-Ist banner: "Having previously admitted that he thought it was good for home ownership to be falling, it is unbelievable that John Healey has now claimed that repossession can be the best option. Tell that to the 46,000 families who have been booted out of their homes in the past 12 months thanks to Labour's record recession. This proves once again that Labour ministers have completely lost touch with reality."
Posted by mark wadsworth @ 03:06 PM (2337 views) Add Comment
27 Comments
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1. Fly By Night said...
This makes me think very much of Monty Python.
2. a saver said...
@Labour's record recession' is not the only factor that has led to record repossession rates. Overly low interest rates and lax lending standards leading to rampant HPI were key factors, leaving many people sitting ducks when the first recession came along. For some reason a lot of the population thought the party would keep going forever.
3. fancypants said...
The truth that dare not speak its name
4. mountain goat said...
Political point scoring. You can see what he meant. If you can't afford the house you live in then you are better off living somewhere else. Best to sell, but if you are under water then repossession seems the best option.
But in this age where the wrong views expressed insensitively can get you sacked, we should expect a big gushing apology from the housing minister.
5. Thecountofnowhere said...
it's good for the country on a whole for more of the same.
6. 51ck-6-51x said...
The fact that some people contacted the BBC to say repossession WAS the best thing to happen to them confirms he spoke the truth. Of course it's not the best thing to happen to them, he was speaking in context - best option regarding their personal balance sheet - many who are repossessed (no not the majority, many) have no clue what their best decision is with regard to finances, if they did they would not hold a mortgage on that house.
I think the comment is a good thing, and hope he does not apologise, but rather adds more precision to his comments - although this being politics, even that will be packaged as an apology.
7. holyroller said...
To be honest, I am much happier renting than I ever was owning a house. The house I live in is sooooo much better than the house I owned and works out a lot cheaper and maintenance to the building isn't my problem either.
Owning a house and struggling to manage bills and a mortgage isn't much fun. If you can't afford it and have no equity (perhaps negative equity) what are you going to do?
8. vacuouspolitician said...
5. holyroller said...
That really is good to hear that you are happy. Yes you are right many people who are up to their necks in debt will probably be having sleepless nights, marriage problems etc. This is a personal tragedy but you'll probably hardly ever hear this said on this money-obsessed clique ridden site.
9. str 2007 said...
Hang on a minute
If you get repossessed and subsequently the house is sold for less than you paid for it, that is your bill. It doesn't magically vanish because you were repossessed.
If can't afford interest only mortgage for a few years in th ehouse you're living in, hold do you suppose that same person can afford to rent instead, bearing in mind they're simple paying BTL mortgage rates (a bit higher than personal) plus a landlords margin and still carrying the debt from the the repossession.
I'm sorry but surely interest only nortgage has to be the answer until finally the prices come back again and or their circumstances improve (even if that is 10 years).
Long term renting is a treadmill to nowhere. The rent doesn't stop in retirement like a repayment mortgage.
What wqe need in this country is more affordable housing that people can afford to buy and live in and repay over 25 years.
BTL speculation has caused most of the problem, pushing up prices due to the business model and reducing the amount of owner occupied housing at the same time.
Forcing all BTL landlords to liquidate their portfolio at say 3% gain for each year they've owned it would sort the problem.
Then for all rental properties in each town village (say 5% of total) to allow for a flexible workforce, to be run by the local authority as a seperate company that ALL local residents can buy shares in as a part of their own pension portfolio.
Simples - as some woould say.
10. str 2007 said...
Apologies for all those typos
11. Gallerymacabre said...
@ 7. str 2007 @ Thursday, February 11, 2010 06:36PM
Great idea but there isn't the political will in this land...
12. hpwatcher said...
Forcing all BTL landlords to liquidate their portfolio at say 3% gain for each year they've owned it would sort the problem.
I agree with this. Home ownership should be limited to no more than 3 houses per person/business.
In any other crisis, items are rationed - why not houses?
13. monty032 said...
What about the 46,000 hard-working families who have been able to buy a repossessed house at an affordable price? Seems the Conservatives don't care about them. This is real affordable housing, not affordable as in taxpayer-subsidised.
14. alan_540 said...
But wasn't the BTL phenomenom because Brown screwed the pension system so people BTL instead for their retirement? Liar mortgages allowed BTL to explode. Poor regulation of lending. This houseprice bubble has been allowed to inflate under this government and it is them that should be blamed - humans are greedy and self serving - that's why good regulation is needed, and it's a travesty that a so called socialist government has been responsible for the biggest housing bubble in the history of this country. I really think that Labour must hate this country to have done what they've done.
15. 51ck-6-51x said...
The real reason that forced repossessions should be seen as "bad" by the government is that voluntary financial transactions are productive by definition; forced repossessions are probably not (although they may be). But they are not going to say any of that because that's not how you win votes, you win votes by fighting for the ..."decent, honest, down to earth, normal, law abiding, hard working, decent, honest, reasonable, sensible, normal, law abiding, tax paying(ish), normal, hard working, honourable, decent, reasonable, normal, British people, who don’t want to pay their speeding fines, providing Common Sense solutions to Common Sense problems." (quotation, Al Murray a.k.a. The Pub Landlord)
16. tenyearstogetmymoneyback said...
7. str 2007 said...If you get repossessed and subsequently the house is sold for less than you paid for it, that is your bill.
It doesn't magically vanish because you were repossessed.
That is why I think it would be better if we had Jingle Mail like they have in the USA (send back the keys and your only problem is a black mark on your credit history). It would certainly concentrate the minds of those giving out mortgages (although of course in the
USA this didn't happen until prices started dropping and keys started being send back).
An even better idea. Jingle Mail for private householders but not for BTLers who after all are running a business.
17. tenyearstogetmymoneyback said...
p.s. Whatever happened to Mortgage Indemnity Insurance. Back in the 1980s it was almost compulsary for any loan over 80%.
18. 51ck-6-51x said...
10y Repo said, "Whatever happened to Mortgage Indemnity Insurance?"
- That is insurance FOR the lender.
I think it's mainly now LPMI (Lender-Paid Private Mortgage Insurance) rather than BPMI (Borrower-Paid Private Mortgage Insurance)
i.e. the borrower does not see the fee, but the insurance is still there.
19. 51ck-6-51x said...
10y Outstanding said, "An even better idea. Jingle Mail for private householders but not for BTLers who after all are running a business."
- Now /that/ could be a vote winner!
20. rumble said...
Agree with Alan - the problem is not the BTL regulations - fix the cause of it, then you won't need the frilly regulations - if credit didn't flow so freely then BTL speculation couldn't have occurred, then prices wouldn't have risen, would have remained affordable. This is my problem with regulation, as I've mentioned before, it tends to forget about the cause and add more complication at the fringe.
Str, I agree that BTL should be a long term, low risk investment, not a giddy t!t on a roller-coaster mania.
Monty, "Seems the Conservatives don't care about them" - Usual undermining of opposition. I'm sure neither party cares about anything but votes. I expect politicians know that not many people consider your point, and there's possibly no ther way to turn that data into a crowd pleaser.
21. titaniccaptain said...
Talking of people owning more than one home at a time I have heard that Meibion Glyndwr may be starting back up their activities...........not a good time for an Englishman to own a second home in Wales!!!!!
200 English owned holiday cottages went up in smoke the last time they decided to go on the rampage!
Wonder what that will do to the price of houses in rural Wales where in some places more than 50% of the housing stock is a second home owned by an Englishman.............
22. str 2007 said...
hpwatcher
''I agree with this. Home ownership should be limited to no more than 3 houses per person/business''.
WTF
I run my own business and have 3 children and a wife. Why the hell should I have the right to buy up 15 houses.
No way, I can't see why any family needs more than 1 house. You shouldn't be able to buy a house until you're 18 or 21.
For the local residents of Cornish fishing villages for example - the coastal cottages are one of their main sources of income due to the tourism they bring in. These shouldn't be owned by people living in London.
They should be owned by a company run by the local council that all LOCAL people have a right to buy long term shares in.
The same goes for any other village, town or city, the rental properties, or should I say a share in them, should be available to all the LOCAL people of those rental properties - not a greedy few.
This would give all the benefits of flexible workforces etc and the tourism industry and put a stop to this ridiculous property speculation that is still going on today despite all that's happened.
I believe a party that stood up strongly for this would win the vote from the majority of people. This is absolutely the root cause of most of our problems.
We as a country need to compete with the rest of the world and overpriced property, be it commercial or residential is a poor starting position.
It adds quite an unnacceptable overhead.
23. rumble said...
str, "Why the hell should I have the right to buy up 15 houses."
-- Without the excessive credit you wouldn't be able to, and therefore would not need to bother with an arbitrary limit.
TC, destroying the properties will reduce supply, up prices - they should rather be setting the Englishmen on fire!
24. mark wadsworth said...
There is no need to regulate mortgages or restrict the number of homes that people can buy, that's a hiding to nothing.
If you introduce Land Value Tax and liberalise planning laws, then it will all sort itself out.
For example, there are some wealthy people who own dozens of cars, so what? The fact that they are buying cars does not, in any real sense, prevent other people from owning cars, because the factory will just churn out more cars. As long as landownership is a COST to the owner, not a source of income and capital gains, then nobody will want to own more than they 'need'. There's no shortage of land, no shortage of bricks and no shortage of construction workers.
25. Ndg said...
Can't believe that. That's a bit like saying a vasectomy is good for procreation.
26. letthemfall said...
I too see tax as the solution, though not just LVT but income tax as well. This addresses the fundamental problem of wealth inequality, and distorted capital allocation.
27. dbc reed said...
See Jingle mail references above.Some Americans can walk away from their property because they have "no recourse" mortgages ie the lenders do n't have any recourse to pursuing non-payers.The idea was that this would make the mortgage providers more prudent in dishing out funds.Of course,it did n't work .They just carried on dishing out mortgages any old how.