HL Deb 04 March 1991 vol 526 cc1190-2

2.48 p.m.

Lord Dean of Beswick asked Her Majesty's Government:

Whether they have any statistics relating to the re-housing of the 40,000 former owner occupiers who lost their homes in 1990 following repossession due to lapsed mortgage repayments.

The Parliamentary Under-Secretary of State, Department of the Environment (Baroness Blatch)

My Lords, our figures reveal that from January to September 1990 some 9,900 homeless households were accepted and found accommodation by local authorities following mortgage arrears. Other borrowers who lost possession of their homes may have other property, moved to less expensive homes, moved in with friends or relatives or rented alternative accommodation. No statistics are available for those categories.

Lord Dean of Beswick

My Lords, last year was a record year with over 40,000 families having their homes repossessed. Does not the Minister agree that a large number of those families became homeless through no fault of their own? Bearing in mind that that happened due to the failure of the Government's financial and economic policies, is not the Minister's Answer at the Dispatch Box small comfort to the people experiencing this terrible tragedy?

Baroness Blatch

My Lords, I agree that the figures this year are worse than ever before. However, perspective is important. There are 9.4 million mortgages; only 0.47 per cent. of those are the subject of repossession. The noble Lord says that the repossession of one home is a tragedy for that family. However, a great deal is being done for those who become homeless. The statistics for the homeless rehoused by local authorities show that 9 per cent. are accounted for as a result of mortgage repossession; 60 per cent are accounted for by family and relationship break-ups.

Baroness Nicol

My Lords, can the noble Baroness say how many of the approximately 9,000 were previously council house tenants who exercised the right to buy?

Baroness Blatch

My Lords, we do not have that breakdown. People in that category who are on income support have their interest payments met by half for the first 16 weeks and thereafter they are met completely.

Lord Dean of Beswick

My Lords, is the Minister aware that some of the building societies are offering lower interest rates for new buyers in the housing market against existing borrowers who are having to cope with the present high interest rates? Does the Minister agree that this practice should be deplored, and that priority should be given to the people who have been suffering for so long because of high interest rates?

Baroness Blatch

My Lords, I disagree with the noble Lord. People in difficulties should seek early assistance from the building societies. The building societies' record for helping such people is to be commended. The societies help people who are in difficulty by deferring interest payments and extending the period over which money can be borrowed. They also help first time buyers.

Lord Dean of Beswick

My Lords, unfortunately, the Minister did not answer the question. I agree with what the noble Baroness said; but my question was a specific one. Some of the building societies are now offering lower interest rates to new purchasers than to people with existing mortgages. Does the Minister agree that people with existing mortgages who have suffered for so long should have priority and not the new buyers? Will the Minister now answer that question?

Baroness Blatch

My Lords, governments do not run building societies. Building societies are managers of their own affairs. When a borrower in difficulties goes to a building society early, the building society has a very real interest in keeping the mortgage as a going concern. Building societies do a great deal to help.

Lord Marsh

My Lords, does the Minister agree that by far the majority of repossessions have taken place concerning people who are in the higher income groups and in professional occupations? Without detracting from the tragedy to those people, does the Minister agree that many of them just bought that which they could not afford to maintain?

Baroness Blatch

My Lords, I am unable to confirm whether the vast majority of repossessions come within that category. But they form a substantial number. I understand that the accountants' profession is most responsible for over-extending itself.

Lord Skelmersdale

My Lords, my noble friend has given very wise advice; namely, go early to your lender. Does she not agree that the real problem is that people who become so disheartened and fed up with the situation literally throw the keys in at the building society door and, in their view, cut their losses? Does she not agree that that is the worst possible thing that they can be advised to do?

Baroness Blatch

My Lords, putting the keys through the door of the building society as a last resort is the worst possible thing for a borrower to do. If the borrower seeks help at the earliest possible moment, the chances are that he will remain in occupation of the house for which he has borrowed.