Housing: Mortgage Arrears and Repossessions (Hansard, 1 March 1990)

§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh)
My Lords, the building societies and the Abbey National had 70,480 mortgages more than six months in arrears at the end of 1989. The same lenders took 13,780 properties into possession in 1989.

§ Lord Dean of Beswick
My Lords, I am grateful for that reply. However, is the Minister aware that although the first half of last year probably produced the best figure since 1984, the second half showed a very serious deterioration as the increased payments started to bite? We are now at the point where repossessions in the last six months of last year increased by 17 per cent. Does he agree that there is at present a very serious situation which is deteriorating even faster?

§ Lord Hesketh
My Lords, it is important to remember that in the past 10 years there has been an increase in home ownership of some 3.5 million. To use the noble Lord's benchmark figure from 1984, in that year the percentage for recoveries of properties on which mortgages had not been paid was 0.171. In the six-month period to which he has just referred as being of a precipitous nature, it was 0.093.

The Earl of Selkirk
My Lords, does my noble friend agree that that factor shows how important and essential good, independent legal and financial advice is in any of these agreements?

§ Lord Hesketh
My Lords, I fully agree with my noble friend. I can assure him that as at 1st February on certain financial documents clear instructions are spelt out warning of the risks of home ownership.

§ Lord Molloy
My Lords, will the noble Lord say what percentage of the figures that he gave to the House relate to former council tenants who are trying to buy their houses and are unable now to do so?

§ Lord Hesketh
My Lords, the figures are collected on the basis of total home ownership and not on the breakdown for which the noble Lord has asked.

§ Lord Dean of Beswick
My Lords, in his reply to me the Minister seemed to draw some laughs from the noble Lords behind him. Does he consider that the other figures that are being produced by the Council of Mortgage Lenders show that 58,000 households are more than six months in arrears? That is an increase of 28 per cent. Does he consider it laughable that 12,000 home buyers are now a year or more behind with their mortgages? That is an increase of 31 per cent. Does he also think it is laughable that repossessions show an increase of 17 per cent.? When one takes into account that for those same people water and electricity payments will increase by a minimum of 13 per cent. and the poll tax is 33 per cent. higher than the Government predicted, what messages of comfort has he for them? Some of them are now going into home ownership bankruptcy. Do they just have to bite the bullet and get on with the business even if it means that to get out of debt they have to move from their houses in order for the building society to put the house back on the market?

§ Lord Hesketh
My Lords, it is certainly not a laughing matter. I think that certain noble Lords were surprised at the comparison in the figures when I produced them. It is a fact that those who suffer most from inflation in our society are the weak and the poor. We are determined to break inflation, and to do that we are having high interest rates.

§ Lord Molloy
My Lords, what is the point of spreading misery? These people are weak and poor. Why create more misery by having increases in mortgage rates, with all the worries that that is bringing to ordinary people? All the Government seem to be concentrating on is making everybody weak, poor and upset.

§ Lord Hesketh
My Lords, that is clearly not the case.