The housing crisis in England

The housing charity Shelter England today called on the government to set up a free mortgage advice service to help with the growing numbers of people seeking help as living costs increase, wages stagnate, and repayment becomes that much harder.

But what government? Why, the UK government. Unlike Northern Ireland, Scotland, Wales, etc – England has no devolved institution that might respond to the current crisis.

On with the story:

Shelter England received eight times as many requests for advice about mortgage problems in 2007 than 2006, it says. The housing charity took more than 80,000 calls from homeowners concerned about falling behind with payments.

It wants mortgage lenders and the Financial Services Authority (FSA) to set up a free dedicated advice line.

The figures were published after the FSA warned a million borrowers could struggle to repay their home loans during 2008.

‘Despair and misery’

The Council of Mortgage Lenders (CML) has already said it expects the number of repossessions to rise to 45,000 in 2008, up from 30,000 in 2007, although still well below the peak of 75,000 seen in 1991.

With repossessions set to rise throughout this year, we simply haven’t got the resources to help everyone
Adam Sampson, Shelter

Shelter accused some lenders of not doing enough to protect consumers, leaving them at risk of the “despair and misery of losing their home”.

The charity is calling for a new free and confidential service which could offer “early stage” advice over the telephone and online to people facing difficulty.

Lenders would be obliged to pass on details of the helpline to borrowers.

Shelter chief executive Adam Sampson said: “A free and impartial advice service is a much needed first step to stop mortgage arrears and repossessions escalating and help thousands of ordinary people keep a roof over their heads.”

Shelter’s report also makes a number of further recommendations:

  • The FSA must clamp down on irresponsible lenders who “too quickly” repossess properties from homeowners in arrears
  • County court judges should be encouraged to take a “tougher line” against lenders who treat customers unfairly
  • A national mortgage rescue scheme should be established to allow homeowners in difficulty to remain in their home
  • The government should strengthen the current income support for mortgage interest (ISMI) scheme
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