It’s time to soften the blow
8:15am Monday 12th May 2008
If an Englishman's home is his castle, then many of these fortresses are under financial siege at present. The latest figures for Bradford show that home repossession orders between January and March of this year rose by 27 per cent compared with the same period last year.
While the actual number of orders is still relatively low, it takes a while for matters to reach this stage so this figure could, and no doubt will, go up as those currently struggling to keep up payments finally lose that battle.
The situation is clearly a result of rising living costs coupled with higher mortgage bills and borrowers must bear some of the blame for taking out large loans on fixed-rates without necessarily thinking about how they would keep up payments if rates soared once such deals expired - which is exactly what is happening at the moment.
But the burden for this mortgage misery must weigh heavily on the consciences of the lenders. After all, the credit crunch behind much of this turmoil was largely of their making - and they were happy to provide big mortgages at unrealistic multiples of the borrowers' salaries during the good times.
They must, then, do what they can to soften the blow and help those who are now in need now the economy has taken a turn for the worse. At the least, this should include passing on interest rate cuts which some lenders are still not doing.
Ensuring a good supply of affordable mortgages to responsible borrowers would also be a major help. At present, it can seem that the only people who qualify for a mortgage are those who don't need one. If that remains so, the housing market will stay in a state of paralysis with soaring repossessions and negative equity doing no-one any good.